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The business you’re in is expanding, and you’re finding it difficult to keep up with the new work that’s being brought in. Congratulations! The fact that your company is growing is a wonderful indication.
However, you are likely worried about hiring the proper personnel to cope with responsibilities as you grow. Is this correct?
Examples of Companies that Outsource
Continue reading to learn how these firms have grown their businesses through outsourcing.
There are numerous alternatives for recruiting staff, but rather than hiring additional full-time in-house staff, you may want to explore outsourcing some of your jobs.
This section will provide a list of successful firms that have used outsourcing as a strategy. To put it another way, before you decide to hire remote workers, you’ll have the opportunity to learn from the experiences of those who have done so successfully.
Alibaba.com
Alibaba.com is a name you’re familiar with. A lot of people browse their website and buy cufflinks, watches, and other little gifts for a fraction of the price they’d pay shopping on Amazon.
Alibaba.com began as a modest online business and has since evolved into one of the world’s largest worldwide e-commerce platforms.
An interesting fact about Alibaba: many of their growth-related initiatives were outsourced.
As soon as we hear the word “outsourcing,” we immediately picture factories in China, virtual assistants in India, and copywriters in the Philippines. While these are excellent alternatives for many businesses looking to grow, China had the polar opposite issue when implementing them.
Hiring remote employees in the United States made the talents they required to create their website more accessible. According to his book, Alibaba’s founder outsourced development to American web developers and saw his firm take off.
Key Takeaway:
- So, when it comes to scalability, do your homework. Is there a better place to find the talents you need to expand your company? Are projects that are outsourced more likely to have a better-qualified team? The answer is yes if you’re Alibaba.
- You need to be able to see your own flaws. By recognizing the skills shortages in the region, Alibaba was able to outsource work and become a successful company.
The narrative of WhatsApp’s outsourcing takes a different turn, mainly to and from the Russian Federation.
WhatsApp had only Thirty full-time and 6 part-time personnel in Mountain View, California, when it was founded in February 2010. What in the world are you thinking?
When it was sold for $19 billion to Facebook two years later, WhatsApp had evolved to be one of the greatest messaging applications in the world.
WhatsApp, on the other hand, did not achieve this level of development merely by relying on its 35-person staff.
The company outsourced development to Russian developers to keep expenses down, and it only cost a fraction of what it would have cost to maintain the business domestically. However, as the company expanded, several Russian developers were transferred to the United States.
Key Takeaway:
- Everywhere you look, there’s talent. If you want to grow your business but are concerned about the price, consider outsourcing your job to people all over the world. If your business grows, you might want to consider moving your most important employees to your home office, much like WhatsApp did.
- Outsourcing not only saves money but also gives you access to a vast skill pool. When it comes to launching a new product, doesn’t this really matter?
Basecamp
With Basecamp, you can manage both on-site and remote employees. Since it’s one of the most widely used project management applications on the market, you might be using it right now.
Basecamp, on the other hand, began as a tiny four-person team and quickly gained momentum. Jason Fried says that as the business grew, it ran into issues with client work, management, and projecting the appropriate image to its clients in order to maintain and develop profitably.
Fried acknowledges that while Basecamp was providing a decent product at a reasonable price, the company’s internal operations were a complete disaster. They needed to make time so that their staff back at home could concentrate on getting this done.
This is when outsourcing comes in handy.
The team began outsourcing app development to distant workers in order to hurry things along. As a result, they were able to make improvements to their product while also being more organized, focusing on business goals, and making required adjustments.
Basecamp now has numerous remote employees working all over the world to maintain the company’s brand, procedures, and product unique.
Key Takeaway:
- A good product and well-organized processes are critical as your business grows. Working with the best global employees can help you improve your product and procedures, as well as set priorities as needed…just like Basecamp.
- Finding your firm’s weak points and enlisting the help of remote programmers to promote changes inside the company are two tips that you may take away from Basecamp.
Google, more than any other firm, is a shining example of sound business practices and successful growth. Almost no one in business is unaware of or does not make use of at least some of Google’s offerings.
In Mountain View, California, Google makes a special effort to look after all of its own employees. However, Google workers aren’t the only ones who gain from working there.
For quite some time, Google has been using remote workers to complete tasks. Everything is outsourced, including virtual assistant tasks, IT work, and software development, to name a few examples. To top it all off, AdWords email assistance is outsourced, and no one is excluded from working there.
At the time, they had over a thousand representatives from over 60 nations. Roughly 10,000 calls weekly were being handled by these people. They were overwhelmed.
Google isn’t the only firm with a mix of workers who work from home and those who work from remote locations. In fact, a number of businesses combine customer service for domestic and international clients.
You must evaluate your company’s costs, objectives, and budget while determining the proper balance.
Key Takeaway:
- Even major corporations, such as Google, use remote workers to complete tasks. The best way to strike a balance between outsourcing and retaining work in-house depends on your demands, the availability of people, your priorities, and your budget. As your business grows, consider outsourcing some of your work.
- For those who are considering outsourcing, do it with a clear head. If your existing team lacks the necessary skills, there’s no need to look for them on the job market. The search for the specialist you seek will take some time, but there will be no additional costs.
TransferWise
A popular money transfer service, Wise (formerly known as TransferWise), is now called Wise. In fact, like Time Doctor, we make use of it all the time. It’s simple to keep track of, organize, and compensate your remote workers using Time Doctor and Wise.
But let’s get back to the tale of how Wise is able to develop its business by hiring remote workers.
Engineers at Wise are assisted by a number of freelancers.
Ukrainian and Estonian developers are sought after by Wise (previously TransferWise), but not for the low cost of labor they provide, but rather for the quality of their work.
Wise prioritizes finding and retaining product engineers that aren’t just like everyone else. Product engineers, according to TransferWise, must:
- Pass an exam that you take at home
- Interview two engineers for a technical project.
- Attend a follow-up technical interview at your discretion.
- Product managers and engineers should be interviewed.
- Finalize your interview with our vice president of development or co-founder
An independent worker’s competence level is assessed through a series of interviews and tests. Someone who has passed the test is top-notch and will produce results for Wise, not simply be cheap.
Wise recruits and empowers the finest people, regardless of where they live.
Key Takeaway:
- Finding the greatest people to create the best outcomes does not have to be about finding the best remote employees on a budget. Finding the strongest developers for your product may necessitate venturing outside of your community.
Skype
Skype is another well-known and frequently-used brand that you are certainly already aware of.
When it comes to easy communication, this company was a pioneer. They made it possible for people all over the world to communicate by phone, chat, and video.
Skype has changed the way businesses do business as an industry leader. In reality, this application has made it easy for companies all around the world to communicate with their remote staff.
Most importantly, Skype has delegated the app’s backend development to a team of three Estonian programmers. Like WhatsApp, Skype began by contracting out the development work but later on brought in these developers as partners.
Microsoft paid $8.5 billion in 2011 to acquire Skype, which is still an important business communication tool.
Skype may not be what it is today if it had not been inclined to outsource tasks to the appropriate developers in Estonia.
Key Takeaway:
- Whenever it comes to hiring employees, don’t put any restrictions on yourself. Outsourcing to the strongest anywhere in the globe may be necessary to find the right team. Do your homework and hire the most qualified individual for the position.
Slack
Your internal employees and various teams may already be utilizing Slack for communication.
If you utilize Slack to handle remote staff, think how much more productive you’ll be.
In order to keep everyone on the same page, Slack is an online communication platform that allows teams to interact quickly.
Slack was founded in 2013 by a group of four smart individuals, however, it was beta tested by a design firm that was contracted out. Copy and design were put to the test by this business.
As a Slack user, you’re familiar with the tone and aesthetic. This investment of $2.8 billion could be exactly what the market needed.
Slack was able to get valuable feedback by outsourcing Beta testing, which allowed them to develop more than just a tool but also a personality. So they were able to introduce an amazing new product that has far exceeded expectations.
Key Takeaway:
- Outsourcing beta testing may be an option if you plan to launch a worldwide product. Before your product is launched, you may gain insight on what adjustments your brand should make, what’s really working, and what is not working. Success, like Slack’s, may lead to the creation of a widely used business tool throughout the world.
- The instance of Slack shows how a business may outsource its development in order to attract substantial funding and flourish with a large user base.
Citigroup
Citigroup, a US-based global financial business, is perhaps the most well-known example of an organization that has outsourced work to another country. Since 1992, Citi has hired workers from the Philippines, India, and Poland as part of its offshore workforce. The company’s efforts went much further in this regard. To save costs, Citigroup cut 11,000 workers in 2014, including many IT professionals. These positions were sent abroad. The firm saved $1.1 billion a year as a result of this change.
Banking giants sometimes use outsourcing of technology development as an example. Banks like Wells Fargo, HSBC, Barclays, and J.P. Morgan, for example, frequently outsource their IT staffing needs to other countries.
Key Takeaway:
Not just startups, but even large businesses and banks, may benefit from outsourcing.
Klout
An influencer rating tool offers influencers score points based on specified criteria to a startup firm. With just a few engineers and IT professionals on his team, founder Joe Fernandez flew to Singapore.
Klout founder Joel Fernandez, a serial entrepreneur, outsourced some of the work on his third firm. Even though it was out of the ordinary, Fernandez spent three months working away from home in the office of his team. He returned with a functional prototype. In comparison to the cost of living in the US, he saved thousands of dollars per year by outsourcing his work.
Bootstrapping, as it is popularly known, helps him to concentrate only on his creations because he is not surrounded by familiar or comfortable distractions.
In the course of roughly 4 months, he devoted his full time to his offshore crew and converted the beta version of his product into a new dimension that drew the attention of many influential people. They raised $40 million in investment in four years, and Lithium Technologies purchased them in 2014 for $200 million.
Key Takeaway:
- Klout sends out a message to startups everywhere: all you need is a concept, and IT outsourcing can take care of the rest.
- The most productive approach to mix onshore and offshore staff is to use both.
- One of the most difficult tasks for a business owner is keeping track of costs, which have a negative impact on the bottom line. For his offshore staff, you will be able to devise clear strategies for success by outsourcing to nations where the minimum salary is lower than in New York City.
- Long-term success necessitates saving money, but not at the expense of quality. Even though there are many skilled individuals all over the world, it is critical to have a strategy in place, particularly when dealing with teams spanning onshore and offshore.
- Non-natives must be able to comprehend and contribute to existing plans if they are brief and clear. Spending time with the staff face-to-face helps them stay focused and productive while the firm works towards its objectives.
- Instead of starting with the key activities, start with non-essential ones. So that their vision may be realized, the key team should oversee and guide the business’s fundamental operations.
- Many company executives make the mistake of beginning a project by outsourcing too much of the work, and as a result, they quickly lose control over the project’s progress.
- By keeping a tight watch on the development process and assigning tasks as they arose, Joel’s team was able to overcome this potential obstacle.
The Benefits of Outsourcing for Small Businesses
1. Keep capital costs under control
There are many reasons to outsource, but lowering costs is one of the most important. Outsourcing turns fixed costs into overhead expenses, freeing up capital for use elsewhere in your company. It also helps you avoid significant outlays at the beginning of your company’s life cycle, which saves you money. Outsourcing can also improve your company’s investor appeal by allowing you to put more money directly into activities that generate income.
2. Boost productivity
Research, production, marketing, and distribution costs are all significantly greater for companies that handle everything in-house, and these costs must be transferred on to customers. The pricing structure and economies of scale of a third-party supplier can provide a significant competitive edge to your business.
3. Lower labor expenses
Temporary employees do not often measure up to your expectations, and hiring and training them may be quite expensive. By using outsourcing, you may concentrate your human capital where they are most needed.
4. Quickly begin new ventures
A competent outsourcing company is well-equipped to begin working on a project immediately. In-house management of the same project could take weeks or even months to employ, train, and support the proper personnel. And the start-up process might be considerably more onerous if a project involves large financial investments (such as the construction of a chain of distribution facilities).
5. Concentrate on your primary business
As a result, every company is constrained by the time and attention of its managers. Outsourcing can allow your organization to focus on customer-serving tasks rather than non-essential ones, and it can assist managers in better defining their objectives.
6. Create a level playing field
In-house support services are prohibitively expensive for most small businesses. To make small businesses appear more substantial, outsourcing opens them up to the same efficiencies and knowledge enjoyed by bigger corporations.
7. Minimize risk
Investing in a business entails some level of risk. In today’s fast-moving markets, everything from competition to government laws to financial circumstances to technology is subject to rapid change. In general, outsourcing companies are better at choosing how to minimize risk in their fields of expertise since they assume and manage it for you.
Which Services Should a Small Business Outsource?
If you’re considering outsourcing, you should know which choices provide the maximum profit, which ones reduce risk the most effectively, and which businesses are the best fits for your company model. Take a look at these possibilities for outsourcing as your company expands and takes on tasks that may necessitate the assistance of experts.
401(k) Administration
Providing retirement plans to employees is a fantastic bonus that small businesses may provide, and if your firm has been financed through an agreement with a ROBS, you’ll need a strategy for accessing that funding. However, a professional 401(k) administration staff frees you from paperwork so you can focus on operating your organization rather than filling out paperwork. Having unrestricted access to a premium plan management team’s plan specialists, detailed reporting, and complete audit protection are all important.
Payroll
Payroll is among the first things that new small business owners need to evaluate when starting out. Being the sole employee or aiming to recruit a small number of workers, it may seem counterintuitive. The fact is that if you want to run a successful business, you must pay your bills, as well as your staff. Paying employees wrong, paying them late, or overpaying employment taxes can have a significant financial impact.
Among the many myths surrounding payroll, ADP and Paychex are only used by major corporations. You may, however, make use of similar payroll solutions as major international companies at a bundle and pricing that is suitable for you. Working with industry giants like ADP and Paychex provides several benefits to small company owners, not the least of which is peace of mind. Both businesses, for example, promise that penalties will be paid in the event that an error is made in your employment taxes.
Bookkeeping and Taxes
Outside of accounting, it’s likely you didn’t become an entrepreneur to keep an eye on our financial records with great care. However, if the task of keeping track of your records does not fall to you, it must be done by someone else and done correctly.
To prepare your business taxes, you’ll most likely require the assistance of a CPA or accountant. Choosing a financial program that your CPA or bank can access will make this procedure much simpler. One of the most widely used accounting programs is Intuit QuickBooks. Because it was designed particularly for small company owners, QuickBooks is simple to use, connects effortlessly with your corporate account, and is now cheaper than ever because it runs online.
Legal
To be successful in business, you’ll almost certainly require the services of an attorney if you aren’t one already. And, again, the nature of the business determines whether or not a company needs in-house counsel. Seek the services of an experienced lawyer who is familiar with your target market and who can assist you to evaluate contracts, make buying choices, and reduce risk in your company.
Legal aid can be obtained from specialist attorneys when needed, or a single outside firm might be contracted to provide ongoing counsel services on a regular basis. It’s possible to discover attorneys through services like Avvo, and Guidant clients receive free yearly consultations with independent legal advice as one of their perks.
Creative Services
It’s possible that you’ll require specialist creative services such as video production or graphic design even if your company already has an experienced marketing manager. A marketing agency, LinkedIn to discover independent artists or UpWork, or Fiverr to locate freelancers can all be viable options, and it all depends on your specific needs.
Corporate Maintenance
Large organizations have a lot of paperwork and bureaucracy that small ones don’t. Nevertheless, the quantity of documentation and detail necessary for the initial establishment of a firm and the obligatory yearly filings can be suffocating. Fortunately, you can outsource the majority of this work. You will need to sign a few documents, but most corporations and legal firms would happily relieve you of this burden.
As with hiring a full-time employee, do your homework on the individuals and organizations you plan to deal with before you outsource your company needs. The fact that something is inexpensive (or costly) does not guarantee that it will benefit your business. Always ask questions and work with firms and individuals that can help you expand your company. The Guidant Financial business services and service partners, which have been hand-selected to offer unique offers and discounts, benefit our clients.
Marketing
A marketing agency from the outside can help you develop your business fast when the time comes. You may focus on the core activities of your business instead of worrying about things like ad design, content development, and social media posting. They also have a lot of specialists that can provide you with innovative ideas and useful tactics that you wouldn’t have otherwise had.
Sales
The same is true if your business does not have the staff or skills to conduct sales calls or to build up funnels and procedures that are geared toward completing agreements. These duties may be delegated to competent persons who will draw in more revenue if you outsource them to sales organizations or experts.
Information Technology Management
The information technology industry is a major one for outsourcing. Outsourced IT services generated $85.6 billion in revenue worldwide in 2014. Any IT difficulties or projects might be outsourced to a managed service provider or a business that provides on-demand help.
Customer Support
You could outsource your customer care strategy to a contact center or chat service if your firm deals with clients primarily online or by phone. To achieve this, you must first put systems in place and ensure that the firm working directly with your consumers receives clear instructions from you.
Manufacturing
Constructing an in-house manufacturing plant might be too expensive for a start-up. As a result, a large number of businesses opt to contract this stage out. Also, this method does not need an offshore location. In terms of global manufacturing, the United States still commands a share of roughly 18%. To maintain your operations close at hand, you may be able to identify domestic outsourcing partners.
Logistics and Shipping
Your production plant or a specialized drop shipping business can ship and handle your items straight to clients if you so want. Ecommerce merchants who wish to concentrate only on their online and marketing efforts may want to consider this alternative.
Research
Does anything about your consumers or your sector as a whole need to be discovered? Effective research is critical for each business decision you make, whether it’s to launch a new product or grow into a new market. Instead of spending days or even weeks assessing your target demographic or becoming lost in a sea of internet material, you can hire a market research agency to perform the work for you instead. More resources should be available to them so that they may bring in even more useful insights.
Human Resources
Human resources include all of your company’s hiring, onboarding, and team management responsibilities. Working with a recruitment agency to bring in qualified personnel for a new post is the most prevalent kind of outsourcing in this field. It is possible, however, to outsource training as well as administration of benefits, payroll, and difficulties related to attendance.
Final Thoughts
If your business is growing and you’re not sure what to do next to keep it going, don’t be hesitant to explore outsourcing options.
You may discover better employees with the assistance of outsourcing. It might assist you in staying on track with your spending plan. The time it saves you can be used by brilliant team members who are working from home but are bogged down by routine duties.
You may find that outsourcing is the answer to your company’s growth and ability to compete on a worldwide basis.
As you start to hire remote workers, don’t forget to make an investment in management solutions to assist you to keep track of them. A project management tool like Basecamp, a solid communication platform like Skype or Slack, and a time monitoring tool like Time Doctor are all part of this package.
