Top Four Benefits of Outsourcing

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Did you know that about 300,000 jobs are outsourced by the United States annually, and larger companies are 66% more likely to outsource jobs than small businesses? Outsourcing is nothing new in the world of building a business. Business owners have recognized how strategic and essential outsourcing services can be to the company’s growth. If you are considering outsourcing services, here are our top four benefits of outsourcing. But first, let’s talk about what outsourcing means.

What is Outsourcing

Outsourcing is when a business hires a freelancer or another business to perform a service for their company. Outsourcing can be for one role, a few roles within a department/team, or it could be the entire team. Sometimes outsourcing is used to fill a gap temporarily, like an interim role. Other times outsourcing can be a strong recruiting strategy to back-fill hard-to-fill positions, keep costs down, or test a different location before committing to open an official company office. There are many good reasons to consider outsourcing as part of your recruiting strategy. 


A great example of outsourcing is Guide to HR. We are a firm that other companies hire to perform HR services. We partner with our clients to provide services such as managing employee performance, administrative services, managing payroll, etc. There are many companies out there like us. In fact, human resource services are one of the most sought-after services that companies are using. So why are companies outsourcing? Let’s go over our top four benefits of outsourcing below.

Benefits of Outsourcing

1. Cost Reduction

Cost reduction is the number one reason companies outsource. In fact, this is the number one reason for 70% of companies that outsource different services.


Outsourcing to a company that specializes in the service you need will save you a ton of money versus hiring someone to perform the task in-house. For example, if you hire employees, you will have to pay their salaries and pay for their new hire training along with ongoing training as your company’s industry changes. There are also hidden costs of employee burden, typically 30-40% of base salary, which includes benefits, taxes, time off, training, and other expenses.


If you hire another company, you do not have to worry about training or investing in employee growth because the outsourced firm will do that themselves

2. More Efficient

Hiring a company specializing in the service you require also gives you the advantage of providing quality work. Companies specializing in specific services typically bring years of experience to the table. They will know the ends and outs of the industry and the services they are providing. 


Innovative outsourcing firms will always invest in their company’s growth to provide top-tier services. This means they are more likely to search for more efficient ways to provide you with quality services. And it typically means that the services provided are up to date on market trends.

3. More Time

Outsourcing services will also give you more time to focus on your company’s growth. If you partner with a trusted business, you can remove your focus from the tasks they will complete, so you can diligently work on scaling your company.

4. Risk Management 

As mentioned before, hiring a company specializing in your needs will provide you with quality service. This will also eliminate the risk of hiring someone with inadequate skills to perform your required tasks. It will help you avoid the cost of recruiting and hiring someone new while avoiding high turnover rates. Plus, the experience outsourcing brings to the company reduces the risk of costly mistakes.


So there you have it — our top four benefits of outsourcing. Growth is crucial when it comes to owning a business. If you desire to scale your company, then perhaps taking a page out of larger companies’ strategies isn’t a bad idea. 


Larger companies are more likely to outsource because they recognize the great benefits. And fun fact, even outsourcing companies outsource services. It is all about sharing and supporting each other’s growth.

Need More Help?

If you are thinking about outsourcing and are wondering what that will look like for your company, or if you are considering outsourcing human resource services, please do not hesitate to reach out. Guide to HR is here to guide you and answer any questions you may have.

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