According to Statista, the global outsourcing industry market value grew from $76.9 billion in 2016 to $92.5 billion in 2019. Despite the increase in automated solutions, the outsourcing industry continues to strengthen.
It’s not difficult to understand why. Businesses have several reasons to outsource, chief among them being cost containment. In this article, we’ll look at the primary reasons that firms choose outsourcing solutions and if this step could prove crucial to success.
59% of businesses outsource to reduce costs. The expense of running in-house teams has become onerous over the last few years. Permanent team members require:
- A safe office environment
- Time off
By partnering with a BPO provider, firms can pay for the capacity they require without the ancillary expense.
Say, for example, that you’re in the United States. Currently, the federal minimum wage is $7.25 per hour. Assuming that you run a 24-hour call center, your salary costs start at $5,220 a month. That allows you to ensure that you have one person operating the phones at all times.
The costs add up quickly as you make allowances for peak call volumes, sick leave, annual leave, and turnover.
Coming in a close second to cost containment is improving focus on the business plan. Bringing in a third-party provider allows firms access to objective advice. By hiring an external company to assist with daily tasks, the business can refocus on the goals they wish to achieve.
Solving capacity issues is another important reason for outsourcing. An in-house team is somewhat inflexible.
Hiring additional team members may involve an extended procedure, making it difficult to upscale teams. Once the permanent consultant is in place, it’s challenging to let them go when down scaling.
Building a team with the assistance of a third-party provider alleviates these issues. It’s up to the provider to ensure that they have enough consultants on hand to service their clients. They, too, will have an expansion model in place, and so will hire team members surplus to their requirements.
Firms may take advantage of this capacity to upscale operations.
Hiring an external firm of support specialists may give businesses a competitive advantage. Considering that service is now acknowledged as one of the client’s chief differentiating factors, it makes sense to take it seriously. Firms outsource to access the capacity and skills that they require.
The value of outsourcing here is that service companies can access the latest equipment, software, and training techniques. They build their business by providing outstanding service and work hard to create a consistent support experience.
Firms may hire them to:
- Answer calls
- Respond to emails
- Conduct live chat sessions
- Answer questions on social media
- Provide 24/7 multilingual support as necessary
- Handle all incoming communications consistently
Handing over specialist tasks such as accounting and tax returns is a time-honored practice in the business world. The more complex the assistance required the more it costs the company. The specialist advice, however, pays for itself in improved compliance.
Companies may rest assured that they’re following the letter of the law at all times. Also, by hiring professionals, they may be sure of being able to anticipate regulatory changes and adjust accordingly.
Firms may choose to partner with an outsourcing firm for many reasons. Chief among these are the potential to save money. The additional flexibility, access to professional services, and improvement in service quality are all potential benefits.
Is outsourcing critical to success? In the current environment, it may well be.