December is a great time to see if you hit all of your goals you ambitiously set out to do just 11 months ago. How well did your business perform? Did you hit those goals, or are you a little off the mark?
One of the big initiatives for many corporations in 2005 was outsourcing jobs outside of their core competencies. The concept of outsourcing developed a stigma in our country, due to jobs being offered to international employees to reduce expenses and increase profits. Outsourced jobs primarily are found in the manufacturing and technology field. According to “The Truth about Outsourcing,” published in the Virginia Viewpoint by Atin Basuchoudhary, Ph.D, “U.S. corporations become more profitable by outsourcing. As the U.S. economy expands, it provides more opportunities for Americans. Indeed, we are seeing the U.S. economy expand in an unprecedented way.”
Basuchoudhary explained the number of jobs is unclear. “As of 2004, employer surveys showed 2.4 million job losses. But household polls indicated a gain of 208,000 jobs. This makes sense in a scenario where large firms increasingly outsource jobs to smaller American businesses.” Therefore, smaller American businesses are given the opportunity to expand and grow, creating more value for the entire economy.
Benefits of Outsourcing
Companies are taking a “hedgehog” approach regarding at what they can be the best in the world and focusing all of their energy on that one area. The “hedgehog” principles are defined in the book Good to Great by Jim Collins. With all eyes focused on the goal, companies increase their chances of hitting the mark and producing great results. With this type of strategy, companies are considering the option of outsourcing roles and functions that support the overall initiatives of the goal.
Some of the benefits of outsourcing include:
• Knowledgeable and experienced consultants. When you outsource a position to a consultant, often you’ll receive a candidate with a higher level of experience than you might have budgeted for with a full-time employee. The industry knowledge and experience consultants bring to the table, in some cases, surpasses an employee’s experience because of the different environments the consultant has been exposed to. Consultants can share their experiences in the field on what works well and what doesn’t. You can capitalize on their knowledge to ensure your projects run smoothly. Also, you only pay for the time the consultant spends working. You never have to pay for down time or non-productive hours.
• Consultants are scalable and flexible. Consultants can scale according to a project’s needs. If the project requires more resources, you simply contact your vendor and request the skills you need. Usually, vendors have pools of candidates ready to go, so you don’t have to spend months trying to find the right person. With a consultant, you can test drive them to make sure they work well with your needs. There isn’t a sticky mess if you have to let them go, as is the case if you have to terminate a full-time employee. Consultants are commonly flexible with their time, too. If you need a consultant to work first, second, or third shift, they’re flexible in accommodating the needs of the project. Everyone wins in this scenario.
• Consultants come with their own support group. Commonly, there’s a network of peers within a vendor partnership that allows consultants to refer questions to their coworkers when there’s a customer question or problem. They rely upon each other’s experience to help them gage a situation. In other words, when you hire a consultant to fill one role, you’re usually getting the brainpower of at least 10 more consultants, depending upon the size of their firm. You have a powerhouse of resources behind every consultant you hire.
• Outsourcing is a cost-effective. The bottom line is that outsourcing saves companies big bucks. By hiring only what you need, in the timeframe you need it, and at an hourly rate that doesn’t include overhead such as insurance benefits, your company is saving money over time.
Selecting the Vendor
When selecting a vendor, businesses usually base their decision on quality and cost. You want a vendor who’ll produce the results you’re looking for at an affordable rate. Select a vendor that has a trusted reputation in the market, and ask for references. Ask questions about consultant turnover and flexible contract terms to meet your needs. You want to know that if you hire a vendor, they’ll act as your business partner in the overall mission of your company.
Vendors that have solid track records and happy customers are the best bet. Make sure your vendor listens to your needs and understands who your customers are. In the end, you want your customers to have a positive experience when working with your company, and everyone at your firm—consultant or not—plays an important part in that show. IBI