UK: The Benefits Of Outsourcing, And How To Choose An Outsourcer

Last Updated: 20 October 2011

As a business leader, you have to delegate certain tasks in order to keep your perspective and generate ideas to grow the business – even if you run a small business. But when you don't have the talent in-house, should you hire or outsource? Many companies are finding great benefits from outsourcing.

Outsourcing isn't always about sending work to India or the Philippines. Many small and mid-sized businesses in the UK outsource functions such as human resources and telemarketing to companies in their own city. But what are the benefits of sticking close to home? And what should you outsource, and what should you keep in-house?

Outsourcing is not always a less expensive solution overall, but outsourcing can allow you to achieve your company goals. Sometimes you have to spend more money in order to focus on your core business. One of TCii's clients reports: "In both telemarketing and human resources, it's been worth it. With human resources, we've found that sometimes our own employees were more comfortable reporting an issue to an outside rep." 

Tips for choosing an outsourcer

Selecting local outsourcing companies can help to improve communication and build longer lasting relationships through face-to-face contact. When you do meet with potential outsourcers and compare services, keep the following real-world advice in mind.

How will they do the outsourced job?

Ask the outsourcing company to walk you through how they will perform the outsourced function. When you solicit bids from outsourcers, make sure that the costs are broken down so that you're comparing apples with apples. Companies often fail to ask outsourcing candidates what sort of backup systems are in place in case something goes wrong – and inevitably something does.

Who will do the outsourced job?

You should know not only how the job you are outsourcing will be done, but also who is going to do it. Make sure you know whether the person performing the outsourced function will be an employee or an independent contractor. Find out who is really responsible for the end product, and check out that person's background and experience.

What will it cost to outsource the job?

When you're shopping for an outsourcer, also ask about hidden fees and insurance. If you will be paying your outsourcer a monthly retainer, enquire about when you might be charged above and beyond that. And in the human resources area, make sure they have errors and omissions insurance.

How to manage an outsourcer

The following are essential to a successful relationship with your outsourcer:

  • regular communication
  • clear expectations
  • assigning the management responsibility clearly within your company
  • service level agreements.

It's not a complete hand-off. You have to provide continual oversight and management.

Face-to-face contact with the outsourcing organisation is essential to ensure that everyone stays up to date. Says one TCii client: "We treat our outsourcers like a part of the team. We bring them in, talk to them about their families, and thank them for what they do for our organisation."

Communication is a key component of an effective relationship with your outsourcer. Your internal team needs to know what's available from your outsourcing vendor and when to utilise the service. For example, in the case of human resources, your department managers need to be aware that a complaint from an employee needs to be dealt with and that the HR outsourcing company needs to be involved.

Next time you are wading through daily tasks and worry about missing the bigger picture, take a step back. Think about how you and your key employees are spending most of your time. Are your principal talents swamped by little things that could be delegated to someone more focused on that type of project? Are there outsourcing companies in your own town that might be able to take those tasks on more efficiently than a single employee?

Outsourcing may cost you in the beginning, but you may find that the benefits to your business in the long run make up the difference exponentially – not to mention the benefits to your own peace of mind.

How to get the most out of outsourcing

  • Outsource tasks that free up your time to focus on your core competency and grow the business.
  • Outsource for the professional skills and knowledge you don't have or can't afford in-house.
  • Outsource to stay current on laws and taxes.
  • Outsource a percentage of a certain function as a backup system.
  • Be sure your outsource provider has a backup system.
  • Check for hidden fees and, when comparing outsourcing services, get a complete breakdown.
  • Be sure that HR services have errors and omissions insurance.
  • Keep in regular touch with your outsource provider.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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