With the emergence of globalization, companies are driven more than ever to delegate business functions to contractors or external agencies. Leveraging cost-effective labor, innovative service, and cutting-edge technology, outsourcing delivers significant advantages that appeal to business owners who have a lot on their plate. However, economists such as Tom Peters and Peter Drucker believe that there are certain undertakings that entrepreneurs should keep in-house. Here’s a list of things you should and shouldn’t outsource.
What You Should Outsource:
1. Hiring
Recruiting high-caliber talent may look easy on paper but in reality, it is a particularly daunting task. Star employees are often occupied and well-compensated. If someone happens to be available, expect stiff competition from other companies.
A third party recruitment agency saves you time and money. They’ve put in the legwork so they already know who’s qualified and who’s available. In addition, most agencies are paid on a commission basis. You get the talent first before parting with your investment.
2. Bookkeeping and Payroll
Hiring an internal bookkeeper might not be enough to keep your finances on track especially if your company is growing. Outsourcing this operation takes a lot off your plate, freeing you to focus on what you do best. Established payroll firms have the latest technologies and best practices as part of their arsenal. You will not only get your accounting expedited but you can also expect it to be virtually risk-free.
3. Social Media
While you should not outsource your brand identity, engaging your market via social media is a time consuming endeavor. Outsourcing this task to an agency or a freelancer with social media expertise should keep your followers engaged while giving a boost to your brand’s online presence.
4. Secretarial Tasks
Appointment setting, encoding, lead generating, and other administrative functions can be outsourced to a qualified remote assistant or contractor. It is a cost-efficient move that can help streamline daily operations.
What You Should Not Outsource:
1. Core Functions
The first step in identifying what to outsource is determining your core competencies. These are the functions that enable your company to deliver a unique value to your market. You never want to outsource these activities for the following reasons:
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Your company fails to learn from experience.
When you outsource a core competency, you get a short-term relief at the cost of missing a good opportunity to grow and develop your expertise.
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It does not contribute to the team’s morale.
If another agency delivers the goods for you, your team will not feel a sense of accomplishment. You may shower the team with money but studies have shown that employees with a sense of purpose are more productive and have higher retention rates.
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Your company becomes isolated.
Business is all about forging connections. If you outsource your unique service, the third party contractor is the one building connections with your client, not you. The highly competitive nature of business might eventually tempt your contractor to go after your client.
2. Customer Service
While many businesses currently outsource their customer service, it isn’t always the best move for your business. If done correctly, outsourcing your customer service can bring tons of value to your business. If done incorrectly, poor experiences between your customers and your outsourced support can lead to bad reviews and bad word of mouth for your business.
An alternative to outsourcing your customer service is chatbots. Chatbots are able to provide a consistent customer service experience and handle basic support tasks. You can also quickly give additional tasks to chatbots that might otherwise take a while to train an outsourced team to do. Using a chatbot platform can enable you to build your own chatbot for your business.
3. Content Creation
While many suggest outsourcing content creation for cost-efficiency, it is a good idea to keep this function in-house. Nobody knows your business like you and your team do so you want to push content that reflects your identity, whether you blog about a learning experience with an irate customer or post a photo of your team’s quirky side.
Experienced remote assistants may help you craft your message but the voice must come from within. You want your audience to be receptive to your brand’s unique identity. Churning recycled content may look like a step toward that goal but it’s actually two steps back.
4. Termination
George Clooney’s character in the movie Up in the Air may give the appearance that termination management by a third party is common practice nowadays. However, it is not. Robert Pagliarini of CBS News writes “ultimately a manager (and potential leader) needs to be able to meet face to face with their employees and deliver both good and bad news.” A number of HR functions can be delegated but dismissals should be done internally with respect.
In Conclusion
Peter Drucker challenged business owners when he said “do what you do best and outsource the rest!” Outsourcing remains a hotly debated topic but this article should help you distinguish the tasks that can be delegated from the tasks that should remain in-house.
