Now that 2020 is finally over, it’s time to reflect on the many lessons imparted by this complicated year. Businesses and people alike have had to reevaluate their course of action and adjust according to the hour’s need.
With regards to the business world, cost-cutting has been the need of the hour. With a significant section of the workforce being decommissioned by the Covid-19 situation, thinking outside the box has been vital. The rest of the crew has also had to make significant changes to their work dynamics.
Working from home has been the mantra of the year gone by. The business world never even knew that it would be possible for such a large population to work from home and be effective. The challenges of the past year proved that working from home was indeed a possibility.
Another major revelation that came our way was about outsourcing. There is an old-age belief in business that it’s always better to create work in-house than to outsource. This age-old myth came crashing down along with the rest of the financial world in 2020.
Now, companies are too aware of using outsourcing as a tool to reduce hiring expenses. This allows them to continue running their business in a “normal” way while accommodating the new out-house staff.
In this article, we look at the six ways outsourcing reduced hiring expenses by 70% in 2020.
Hiring is an Expensive Process
It’s a widely known fact that it costs far more money to hire a new employee than to retain previous personnel. However, a lesser highlighted point is that it costs even less money to outsource specific tasks to external individuals or agencies.
A vast majority of corporations have had to put a freeze on their hiring processes this past year. Many had to let go of existing employees as well to cut back on costs.
Thus by forcefully having to cut back on the inherently expensive process of conducting interviews, background checks, written tests, etc., companies ended up reducing their hiring expenses substantially in the past year.
Outsourcing can Tackle All Your Needs
One of the most critical reasons outsourcing worked across the board is the sheer quality of companies out there to tackle your needs. You can pretty much look to outsource any sphere of your work and find an agency that can match up to the task.
When it comes to outsourcing based on different segments of your workforce, three central departments can be tackled externally.
Business Process Outsourcing: These are agencies that deal with all the front office and back office outsourcing. They helped mostly with the business processes that help your organization stay afloat. This included various segments such as inventory, stocking, reception, office management, etc.
Software Outsourcing: This has to do with the development of software services to assist your business. This can also include a wide range of services from accounting to quality control. If your business requires digital software to improve its functioning, you can always find an agency to conduct this work line for you.
Infrastructure and Technology Outsourcing: These are all the outsourcing services that are related to networking and technological services. They are responsible for your organization’s smooth functioning and ensure that all your employees and clients are well-connected.
Hence, we see that an organization’s three giant spheres could be outsourced based on your needs and requirements. Once you recognize which area of your work makes the most sense to outsource, you’re well on your way to reducing hiring expenses. A lot of companies did precisely this in 2020 and saved on their hiring expenses.
Lower Cost of Operations
Numerous countries worldwide help with outsourcing processes, as many organizations sought outsourcing firms in developing countries to cut costs. This included using the help of Asian giants India and China as they have many firms that are ready to tackle the excess work from the developed countries.
Hence by picking the right company to tackle the right jobs, numerous companies were able to cut down on their hiring expenses and additional expenses of running all departments.
Cut Back on Additional Costs
Once you hire an employee into your company, you’re also responsible for offering them additional benefits such as a pension scheme or health/medical insurance. All of these costs can be effectively scaled by using outsourced agencies.
Many companies did precisely this and saved tons of money on offering insurance and other services to the new employees. It’s important to remember that hiring expenses don’t end with the hiring processes, but they only compound once you have taught an individual into your organization.
It’s important to note that the medical risks involved in meeting and interacting with new employees were substantially higher this past year. It was dangerous for HR personnel to interact with potential employees because of the Covid-19 situation. Thus, it made financial and medical sense to outsource work to prevent any medical disasters.
Training a new employee to perfectly fit the role of their new job requirement can be challenging. It’s double more difficult when training has to be done remotely and individually to many people because of the Covid-19 pandemic. Due to this, many organizations cut back on training costs by hiring outsourcing agencies for such tasks.
This ensured that the company would tackle all its needs without jeopardizing any new or old employees’ health.