advantages of outsourcing

In the early days of being a start up, SMEs can lack the manpower to perform non-core business functions, often leaving tasks undone. At this stage, hiring additional full time employees is unlikely to be an option but companies still need to source assistance. It is at this time that they begin to look at the advantages of outsourcing. 

A study by PwC showed that small businesses that outsourced, grew faster, larger and more profitable than those that don’t. Since 2014 companies are outsourcing as a way to remain nimble in regulatory and technology areas.

Previously jobs like call handling or administration were outsourced but we are seeing an increasing number of businesses looking to outsource payroll, human resources and recruitment.

Outsourcing lets small to medium sized businesses have access to experts with less risk to them in their early stages of growth.

Another shift that we are seeing is that traditionally larger companies would not need to use outsourcing services, however this is changing as they explore new markets and sectors. Outsourcing gives them access to experts without the need to take on permanent staff.

Cost advantages of outsourcing

Outsourcing non-core tasks are less expensive than hiring a full time employee. Economies of scale mean that outsourcing is cheaper than hiring a freelancer. According to a Deloitte survey, 59% of respondents say they use outsourcing to reduce costs.

Increased efficiency

The outsourced agent should be a professional who specializes in the task that you require. They will have the expertise they need to complete what you need in the time that suits your business. As they are solely there to focus on one particular area, they do not get sidetracked into other areas of the business like permanent employees can.

The same Deloitte survey showed that 20% of respondents used outsourcing to increase efficiency.

Allows focus on core areas

Outsourcing non-core tasks frees more time for the business to focus on its core business functions. These are the services or product that the business offers and outsourcing can allow business to improve services or add to their range of products. The Deloitte 2016 Global Outsourcing survey showed that 57% of respondents are motivated to outsource for these reasons.

Save on infrastructure

Outsourcing eliminates the cost of infrastructure growth within the company. It allows for cost savings on operational costs, as these are handled by the outsourcing provider. Outsourcing means that businesses can get highly skilled workers without the overheads required for a permanent hire, such as office space, salary and benefits.

Outsourcing has numerous benefits for businesses that want to grow or expand into new markets, but are unable to fulfill the requirements in-house. It allows them to maximize on their growth potential whilst saving money, increasing efficiency and reducing risk.

For companies looking to expand, grow and establish a presence in Saudi Arabia, Proven provides a full range of business support services. To see how we can help you grow in Saudi Arabia or to discuss the advantages of outsourcing further, contact our expert team on +966 (11) 411 1127 or info@proven-sa.com.

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