What and When Should You Outsource?

Determining what and when to outsource is an important strategic decision.

In the business and finance world, managers must continually analyze, evaluate, and make good decisions to run a business successfully. One decision a manager is usually faced with is leveraging the financing of the company. This involves deciding how to best use the company’s assets in operating the business and financing the needs. As we often hear, human resource is a business’ most valuable asset and one of the decisions managers often make is whether or not to utilize external resources or keep functions in-house and hire more staff.

When to outsource usually depends on how much pain the manager is in. When everyday tasks, for example, bookkeeping and administrative activities, pile up and information is not available to make important business decisions, is one time that outsourcing can help get things back on track and keep the business moving forward. Other times to outsource are when customer calls increase, it’s a busy season in the industry, the work requires a specialist, or the in-house staff does not have the capacity.

What should you outsource? Some common tasks that small businesses outsource are accounting/bookkeeping, administrative activities, customer support, data management, marketing/sales campaigns, and research for various business needs. In addition, areas such as recruiting and sourcing — though quite vital to the business in acquiring the right talent for growth — may not need year-round resource. Consider outsourcing when a business is hiring its first set of employees or during a growth spurt. For any size business, a talent acquisition professional can also develop hiring/staffing strategies, implement them, and hand them off to an internal team to manage.

Outsourcing versus keeping the work in-house involves many criteria to take into consideration. For example, the decision is sometimes based on the size of the business, whether it is established or a start-up, its funding, and the industry in which it operates. Being able to control costs, gain access to specialized skills, and free up internal resources are benefits that managers look to attain when deciding out outsource. To realize these benefits, it’s important to have open communication and a relationship management plan.

Rosemarie Harvey is a virtual business manager and talent acquisition advisor at RH Business Support.