The current competitive labor market, coupled with the highest inflation rate we’ve seen in decades, has placed unique pressures on employers to recruit and retain quality talent while attempting to keep costs low.
While the labor shortage continues to challenge employers across all sectors, our country’s inflation rates soared to 8.6 percent in May, the highest we’ve seen since December 1981 There are more jobs available than workers can fill them. Wages are the largest cost for marketing, PR and advertising agencies. Most firms have a long list of job openings that are difficult to fill. How do you fill it? It is time to evaluate and analyze your operations for the long-term health of your business, and it may be time to consider outsourcing some functions.
The emergence and reliability of cloud-based technology and shifting workplace models have opened the door to outsourcing tasks to specialty firms. Administrative personnel have traditionally performed several internal business tasks, including payroll, recruiting, scheduling, billing, and even marketing. The model may not be the most efficient, productive or sustainable for the long-term growth of your agency in the current economic climate.
Many outsourcing firms will tailor their services to fit your unique needs as all agencies aren’t the same. Your core business function can be supported by the right outsourcing services. Reducing overhead costs and increasing productivity are some of the benefits that outsourcing can provide. Six reasons why outsourcing may be the right path for your business are given.
Why don’t you do it?
Many marketing, PR and advertising agencies are lean, tight-knit and focused on drumming up new business rather than perfect internal business processes. You would typically find roles in larger operations that are not available in this area. Some of the benefits of outsourcing include:
With the current labor challenges, it can be difficult to find experienced employees who are happy to perform more manual or repetitive tasks. If you work with an outsourcing firm or organization, you can eliminate time spent on recruiting.
If your organization is struggling with a high turnover rate, training can be time consuming and expensive. It can be easier to control the timing and outcome through outsourcing than it is to spend time on hiring and training an employee.
With remote work accessibility increasing, some organizations choose toOutsource to markets with a lower cost of living, either in the U.S. or overseas Health and dental insurance, 401(k) contributions and equipment for the employee are not covered by the employer.
When you hire a specific firm, they are trained for the role you need. They are experts in the fields of accounting and IT. You don’t need to spend a lot of time training employees on new processes; you’re getting some of the best and most efficient talent.
It is important to respond to changes and updates in a timely manner. Quality and strategic work can be hard for your staff to complete if they are bogged down with mundane tasks. Outsourcing allows for more flexibility and agility. Your internal team can focus on producing quality work if they are freed up by outsourcing.
When outsourcing, you’re paying for the technologically advanced tools, processes, and processes that the outsourcing company has invested in, in addition to labor. If a company only uses outsourcing for video recording and editing, you can assume they have access to the best equipment and software. Quality data collection tools are used to research a new target market if you have hired a firm.
Areas to think about outsourcing.
It’s not uncommon for people to wear multiple hats. As your business grows, it can be challenging to sustain this model. If you don’t have the resources to hire individuals dedicated to these roles internally, you should consider outsourcing the functions.
- HR and payroll: There are many companies that can provide outsourced HR and payroll services. These organizations can provide several aspects of the HR function, including benefits administration, recruitment, employee support, payroll and employee data management.
- IT: IT is another important function, especially with rising security threats and data breaches. Many agencies choose to outsource IT to manage data and security, software and internal technology support.
- Client administration: Agencies can benefit from outsourcing to a client administration company to manage client-facing tasks including managing contracts, agreements, required documentation, scheduling and even the proposal process.
- Accounting: By outsourcing the accounting and finance function, you can receive day-to-day transactional support including bill pay and invoicing, accounting assistance with complex GAAP matters, financial advice on contracts and agreements, forecasting, budgeting, KPI analysis and more.
Steps are taken to implement an outsourcing process.
To maximize the potential of your outsourcing operation, you need to develop a plan. Before implementing an outsourcing procedure, there are a few things to consider.
- Hold a strategy session with key stakeholders and leaders within your organization to identify areas for outsourcing. Understand the risks and benefits of outsourcing from multiple perspectives before beginning your process.
- Develop a written plan with benchmarks and a timeline that factors in the time to hire a firm and evaluate after initiation.
- Identify key companies that align with your values and can assist with the tasks you need. After youâ€™ve selected possible partners, be sure to thoroughly interview them before making a decision.
- Initiate and re-evaluate the outsourcing process. Try to follow your written plan as closely as possible.
If you have a business model, outsourcing could be a smart idea. Before outsourcing, be sure to understand the costs, priorities and expected outcomes from both ends. Whether used as a stopgap measure for lack of talent or a way to reduce costs, outsourcing can be useful.
It’s a plus.
Dominic Rovano is the leader of the Professional Services Group at Janover.