Pros and Cons to Outsourcing Business Management
Although outsourcing business management is not new, it is still not often considered by businesses. When outsourcing business management you are choosing to allow a third party person or organization to come alongside you and meet your needs in various different areas. Outsourced business management can assist in human resources, financials, strategy, virtual assistance, project management, operations and more. As with all things, there are definite benefits and drawbacks to choosing to outsource your business management.
Overhead is any cost that is not directly pertaining to a business’s goods or services output. This includes the cost of office space, software, taxes or even training and professional development. When you hire an outside person or organization they are responsible for this independently. This leaves you with less work, less overhead and less to think about and accommodate for.
Higher Level of Expertise
If you were to hire a trained employee with work history and responsibility of an outsourced organization or individual, you would be paying a high premium. Often a business is in need of such high level expertise but not able to afford them. With outsourcing, you only pay for the hours you will need the expert. You get to utilize a higher level of experience for a lower price.
Larger Upfront Expense
Though you do not have to worry about paying taxes, software, in-office costs, or
professional development, the outsourced team does and must price accordingly. This means the hourly rate may be as much as 30% higher than an employee. However, most times this price increase is offset by the experience, and diligence in self and professional development.
Higher Turnover Rates
Turnover rates must be considered when hiring an employee and an independent contractor or an agency. Many outsourced roles can have a high turnover. Finding someone you can trust as well as get along and work well with can be difficult. This can be combated by consistent and honest conversation about professional intentions. Establishing trust and a good flow of communication is the best way to prevent potential turnover.
The benefits of outsourcing business management can be overlooked in response to sticker shock over the price tag. However, the pros heavily outweigh the cons. The avenues of potential business gain through outsourcing are endless. If you are ready to take the plunge, allow us to come alongside you and provide a strategy that serves. Our trademarked and purposeful process will leave you feeling refreshed with business strategy that serves your clients, your business and even your personal life.