Fara Haron, Regional CEO NAISAUKI & EVP Global Clients at Majorel.
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The American economy has seen quite a bit of turbulence this year. It makes sense that, between inflation, supply chain issues and falling stocks, many are worried that our economy is on the brink of a recession. In response to these concerns, many technology leaders have cut headcounts, scaled back operations and focused on paring down line items to make weathering the expected economic downturn more manageable.
These are understandable approaches that can certainly help leaders meet goals in the short term. However, taking this route could come at the expense of larger business objectives as it may lower quality, stifle plans for growth or lead to overworked teams that are unable to contribute their best to the company.
Opting to outsource certain areas, rather than downsizing or eliminating their function, can help up-and-comers and established technology vendors meet quarterly goals while staying on track to meet long-term goals. In times of economic trouble, allowing experts to take the lead where possible can help ensure the continued quality of a company’s products and services while helping to lighten the load on internal teams.
The Perks Of Partnership
Opting to outsource in times of economic uncertainty can help software and other tech companies open new doors and streamline operations. It also allows leaders to meet budgetary goals by doing the following:
1. Tapping Into New Labor Markets
As inflation rises, wage increases follow close behind. Outsourcing certain processes and business functions—like customer service, bill processing or records management—opens more affordable labor pools, which can help keep costs low.
While hiring outside help may feel counterintuitive when trying to cut back on costs, it’s actually far less expensive when you compare rates. For example, if a tech start-up operates in a high-cost American city—like New York or Los Angeles—engaging customer service representatives in a market with a lower cost of living can help reduce costs significantly. By tapping into labor markets in more rural areas, either domestically or abroad, managers can cut labor spending without running on skeleton crews.
Furthermore, the return can be even more significant when working with an outsourcing partner that has an international presence. In fact, a business process outsourcer (BPO) with operations in emerging regions can help cut costs significantly while extending their partners’ global reach and bringing lucrative work opportunities to underserved regions.
2. Reducing Risk
In uncertain economies, removing risk can also help tech leaders find more peace of mind. Building new facilities or hiring seasonal workers to meet spiking demand are risky endeavors, especially in times of belt-tightening and cost-cutting. There’s always the chance that it won’t pay off or go as planned.
Outsourcing these and other functions can help mitigate that risk. Most companies that offer outsourcing services become responsible for the financial risk associated with staffing, managing teams, opening new locations, onboarding and more.
Even though adding another entity into the mix can feel like a risky choice, doing so ultimately helps start-ups and legacy institutions operate with more confidence, so employers are able to get back to running the ship without all the added stress.
3. Increasing Flexibility To Facilitate Scalability
Outsourcing certain teams to specialized partners can help tech companies increase their flexibility and scalability, which is incredibly important when navigating a tumultuous economy. It allows companies that specialize in emerging tech to streamline their operations, offering the agility to pivot or scale offerings at the drop of a hat.
Companies that outsource customer service, for example, will be better positioned to accommodate spikes in demand as their service partner has the resources to reallocate labor, train any new workers and oversee progress to ensure quality service despite changes in volume. If demand drops, the BPO can take the lead when restructuring teams, re-strategizing or suggesting alternative methods that may drive better results.
4. Boosting Efficiency With Expertise
Finally, expertise is crucial in times of uncertainty—and BPOs offer just that. Whether it’s a software company looking to get help producing content or running communications or a start-up looking for guidance on developing new internal processes or managing customer service teams at scale, working with an experienced partner can streamline the experience.
They’re experts at delivering top-quality work and alleviating growing pains. BPOs invest in the latest technology, have tried-and-true strategies for success and cultivate teams that are highly skilled at delivering excellence in their fields. The result? Fewer mistakes, more unique ideas, better execution and, ultimately, more satisfied clients and customers.
The Power Of Outsourcing In A Down Economy
While adding something new to the budget may seem counterintuitive in turbulent economic times, it’s imperative that leaders take a step back and consider the big picture. Being cost-efficient isn’t just about slashing line items, it’s about creating more streamlined and productive teams and processes.
Leaders looking into next steps for outsourcing should determine their organizational needs and weigh them across several BPO offerings, clearly communicate their budgets and outcome expectations for the partnership and set up trainings for internal and external partners to understand the evolving roles within their customer service systems.
Companies that decide to outsource often get a significant return on their investments. The expanded access to talent, reduced risk, increased flexibility and boosted efficiency outsourcing can help tech leaders build more agile, confident and productive businesses. In today’s unstable market, that is the key to ongoing success.
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