Outsourcing makes sense in a downturn because...

By: Andy Dickens

Date: 22 June 2009

Outsourcing makes sense in a downturn because…

No company can escape the current financial downturn that’s affecting the global economy. Europe has slipped into a recession and the United Kingdom may shortly follow suit. In order to make the most of these tough times, many companies are looking to outsourcing specialists to provide much needed specialist support to maximise their efficiency and ensure their long-term survival?

Outsourcing is not a new phenomenon; it’s a tried and tested model. In the early part of this decade there was an economic slow down. During this time, outsourcing companies found more than ever that they were able to assist and support other businesses in times of trouble. Some companies are cautious about outsourcing in the current financial climate, mistakenly assuming it means an additional expense, but there are many reasons why outsourcing makes sense in a downturn, and here’s 10 of them:

ONE: You can cut costs without cutting corners. Outsourcing allows you to provide the same level of provision to your customers or clients without having to compromise or cut back on the quality of experience/service they receive. At the same time, because some core costs are reduced such as equipment, advertising and recruitment – you maintain your standards whilst reducing your costs. This will have a positive effect on your bottom line. If you’re in danger of dropping the level or standard of service that you offer your clients, you are in danger of losing those clients to your competition. Don’t even consider cutting corners – you can’t bounce back from this without the support of your clients/customers.

TWO: You can focus on your core concerns, the things that you are best at. Outsourcing is not just about saving financial cost implications, but also saving time and allowing you to focus on your core business issues. If the downturn has made you feel that there are no longer enough hours in the day, (were there ever?) then you’ll know that outsourcing could free up more time for you and your staff to spend on the central and fundamental concerns of the business. Decide upon which activities require your greatest focus and efforts, and free up your time by outsourcing the rest.

THREE: You may need to lose staff, but you don’t have to lose your shirt! There may be a need for redundancy, or saying goodbye to casual, temporary or part time workers. Outsourcing can cost you less than the cost of retaining those non-business critical staff/employees. You are doing this to safeguard your present full time employees, but it may be frustrating to see them go because you don’t know what’s around the next corner. When you outsource, your business remains effective, despite the reduction in numbers. If you’re ever to return your business to its pre-credit crunch glory, you may need to outsource to secure your current employee’s future.

FOUR: You can more efficiently manage your Human Resources. During this downturn, you may need 100 telemarketers for one campaign but only 10 for the next. Regularly, you’d have your remaining staff draining your budget. When you outsource, you can add or reduce your staff as and when you need them. By reducing some of your fixed operating costs you can deliver greater economic freedom to your company. With completely flexible staff numbers you can increase or decrease the workforce to whatever size you need to meet your current challenges.

FIVE: You can change horses midstream. When you outsource your needs, you can make amendments immediately, make a decision, change your mind, improve equipment, increase staff, decrease equipment – do whatever it takes, whenever necessary to keep your business afloat. Your outsourcing contract should be flexible enough to make a decision immediately in order to respond to necessary demands.

SIX: You can outsource many more services than you realise. Payroll, Sales, Marketing, Secretarial, Reception, IT, Lead Generation, Telesales and Telemarketing are among the many services that could all help you cut your short to medium term costs in a downturn. Telemarketing and Sales are particularly important. To effectively see your way through this economic nightmare, you need to bring in business – whether it is from new or existing customers/clients, you must increase sales and reduce costs in order to sail safely through this financial storm. Outsourcing can be used to achieve both of these goals.

SEVEN: Outsourcing is targeted professional activity. You can only go on losing money for so long before your business will start to collapse, so take action now! Whatever cuts you are going to make, you need to make them with the full knowledge that they are best for the future of the company. Outsourcing allows businesses to take proactive steps to maintain their status and trading capacity during difficult times.

EIGHT: Outsourcing can protect your company culture and staff morale. You shouldn’t force your existing staff to do more work for the same wages but without outsourcing, you may have to do it. It’s bound to happen if you have to reduce your staff numbers. As your workforce decreases, you still need the same tasks completed. Asking your current staff to take on these additional roles and tasks may cause problems in the workplace. You should expect an increase in the number of sick days, a decrease in general morale and this can affect your company’s productivity at a time when it matters most. Outsource before you drive your staff into early retirement.

NINE: Outsourcing helps you do more of what you do well. If your business isn’t badly affected by the downturn, you need to make hay while the sun shines! You’re lucky, you’re in one of those areas that people cannot do without, you’re a niche or a necessity, and perhaps you’re making even more money. Outsourcing can help you respond to the increased need for your product or service and allow you the room to do this without increasing your fixed operating costs.

TEN: Model other successful organisations. As the credit crunch takes a bite out of British commerce and despite the evident slow down in the economy and the threat of recession, billions of pounds in outsourcing deals are being agreed in the UK. If other companies are taking advantage of the benefits of outsourcing, then your business should be considering it too. Don’t be the last to realise that outsourcing solutions could save your business before it’s too late.

For expert advice on outsourcing your business needs, speak to a representative at VSL, the downturn doesn’t have to be a disaster for your business.

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