outsource, human capital, human resources,

Do You Outsource?

Written by Alex Jimenez

Outsourcing models are not revolutionary. Organizations have been outsourcing essential functions and roles for decades, and in most organizations, there is always some type of outsourced support model in play.

With that historical precedent, why do organizations continue to question the validity of the model?  Why do leaders get so worked up about it or vow they will never do it? The same could be said of teleworking. Is their hesitation that an outsourced element will not fit the business model? Are they concerned about whether outsourced support can adhere to the same quality standards as the team and  resources working in house?

There is a laundry list of reasons I have heard about why outsourcing is inferior to internal staff, and while many of these arguments are valid, they are not insurmountable. I would argue that investing in outsourcing correctly will help not only scale your organization, but also teach your internal resources how to do their jobs better.

Here is a summary of some key risks and benefits that I typically weigh when considering an outsourced model:

Risks of Outsourcing

  1. The quality of work could decrease with less oversight.
  2. Outsourced support is not as flexible and may not be able to handle urgent tasks when they pop up.
  3. Outsourcing work that will need to be reviewed by internal teams may end up taking up more of the internal team’s time than simply completing the task themselves.
  4. Outsourced resources may not have the same passion for the business as those on internal teams.

Benefits of Outsourcing

  1. A strong bench of outsourced resources allows your business to scale up and down faster based on workload.
  2. Outsourced resources reduce cost and allow internal staff to focus on more strategic tasks.
  3. Outsourced resource management is a good management training tool for internal staff who may become managers down the road.
  4. Outsourced resource management forces your internal team to document tasks and become better at communicating expectations and progress.

Before you begin outsourcing work blindly (which is ill-advised), there are a few key items you need to work through first.

1. What tasks and responsibilities should you outsource?

The first tasks that should be considered for outsourcing are those that require little to no strategic oversight. These are the tasks that fill people’s time but require little to no management and are easily documented, communicated and measured. Things like proofreading, data entry, and report generation are tasks that can be documented quickly, and their outputs can be measured quickly for quality and timeliness, or throughput.

2. Based on the tasks identified, what will be the level of effort for the outsourced resource?

Your internal team needs to be able to gauge how much time these tasks take them on a daily, weekly, or monthly basis. If the answer is less than five hours per week, for example, outsourcing this task may not provide enough bandwidth back to your team to create any real value. This assessment also provides the essential baseline to ensure the outsourced resource(s) can meet the same level of throughput that your internal team can—perhaps not immediately, but within 30-60 days. Understanding a baseline level of effort will also allow you to be very clear about the type of outsourced resource(s) your organization will require.

3. Are your processes prepared for outsourced resources?

Once you have accomplished the steps above, you are still not ready to go find support. You need to then evaluate if you have the proper documentation to easily communicate to a new resource not only how the work is done, but why the work is important. If you do not have the proper documentation, this is a gap that needs to be addressed before you outsource.

One could also argue that if you do not have documentation, this is an opportunity for your internal team to gauge if there are better ways to do the work moving forward. This is the step that will not only improve the probability of success when outsourcing, but likely help improve the quality of work and level of motivation for your internal teams as well.

4. Does the model make sense for your business?

Evaluate whether outsourcing makes financial sense for your business. This is pretty straightforward—but be careful. Sometimes the value of outsourcing is not about saving money, but about saving time. Just because an outsourced resource costs you the same at an hourly rate—though you will likely not pay benefits—it may still save you money because you only need to outsource 20 hours a week instead of hiring a full-time resource who will not be 100 percent busy.

5. Finding outsourced support should be treated like any other hiring process.

Identify at least three options and invite them to interview. Ask for references and case studies. Ensure that they are qualified to do the work and that there is strong cultural alignment with your internal team. While they are most likely not going to sit in your office, a good outsourced partner will become an extension of your team, so you need to make sure they are a good fit.

How Outsourcing Can Help Your Team

There are other areas you and your team need to evaluate before moving to an outsourced model. The first few times out of the of the gate, you and your team may stumble. That is ok.

In the long run, the benefits of an outsourced resource pool will far outweigh the negatives. Your team will be able to flex up and down rapidly depending on workload and trust that the work is getting done at the same level of quality no matter where the tasks are being performed. Your staff will no longer feel like a huge uptick in work would crush them, and leadership will be able have the confidence that even if the organization grows, the work product will not suffer.

Even if outsourcing is a small part of your work model, having the right outsourced model is just another great tool in your toolbelt.