As part of our 600 Interesting and Useful Things for Recruiters series Paul Marsden, shares his thoughts on the 5 value adds and 5 pitfalls of outsourcing.
There are plenty of value adds when it comes to outsourcing, but here are some of the less obvious.
1. It can cut your payroll by up to half. When you employ someone for a headline salary, with all the frills and extras you are either obliged to pay them or choose to pay them, you can find your costs escalating to double that headline salary in no time. With downtime, holiday time, sick time and training time being funded by you, this can become a real drain. With outsourcing you pay only for what you need, when you need it.
2. It makes experts more affordable and more accessible. If your business is lacking a specific skill, but there’s no way you can justify employing someone to plug that gap, then outsourcing is the perfect solution. Only too often SMEs find themselves in a situation where they can’t make a proposal or respond to a RFQ because they have a missing link in the chain. Reaching out on an outsourcing basis can solve this issue in a really cost effective way.
3. It increases your competitive edge. With outsourcing, your business can become whatever you want it to be without draining your resources. By nimble footedly using outsourcing, you can build your team to fit any market opportunities that arise. You can simply buy in skills as you need them to respond to gaps in the market that will truly set you ahead of your competitors. What’s more, you can do this without any long-term obligation or commitment.
4. It gets your tedious jobs done. If bookkeeping, payroll, invoicing or even office cleaning is driving you or your staff nuts, it’s simple. Outsource.
5. It means you can (pretty much) wash your hands of responsibility. If you choose the right outsourcing company, they’ll give you guarantees of compliance and timeliness. This is great news for any SME owner who constantly finds themselves on the back foot when it comes to meeting the likes of HMRC deadlines.
When it comes to the pitfalls of outsourcing, to be honest, these are mainly related to choice of outsourcing supplier, so here are the things to look out for:
1. Language issues. One of the most common complaints about outsourcing is related to accents and language issues. Needless to say, these complaints come from companies who have chosen to outsource their tasks to offshore locations. Making sure you outsource on home-turf means that you won’t have these difficulties.
2. Time zone issues. Again an issue with offshore outsourcing, there are few things more frustrating than taking up an outsourcing offer only to find that the entire workforce of the company you’ve selected happens to be sleeping when you’re working! Again, an onshore option removes this pitfall entirely.
3. Quality. Quality is a ‘soft’ and subjective issue, but there’s no getting away from the fact that if you’re passing your work over to a complete stranger you need some reassurance on quality. A good outsourcing provider will give you precise and measurable quality standards and will back these up with guarantees and assurances, which will enable you to work with confidence.
4. Personality. Gone are the days where any faceless outsourcing supplier deserves business. What you should be looking out for now is an outsourcing connection that knows and understands that you need to have a personal relationship with your payroll provider or your remote HR supplier. You should expect (at least) one named contact and preferably a back up who knows and understands your business and your unique needs.
5. Price. One of the main reasons for outsourcing is to save money, so there’s no point in being shy when it comes to negotiating. The outsourcing sector has become highly competitive and there are some great deals to be had. If you decide to outsource, make sure you secure one for your business!
About the author: This article was written and submitted by Paul Marsden, who advises and promotes the Payplus Payroll Bureau. By qualification Paul is a Tax Accountant, but these days does little in the way of tax accounting. In his role as accountant he has worked with small and medium sized businesses for over 25 years; a period that has seen many changes, particularly regarding the accessibility and implementation of technology.
Paul has an exceptionally strong personal and professional interest in technology and gets a real buzz from helping business owners use technology to become more efficient so they have more time to focus on business growth.
He’s spent the last 5 years running an outsourcing business that provides bookkeeping, payroll and accounting software services to SMBs. Paul is a member of the IAAITC (International Association of Accountants Innovation and Technology Consultants), a group of UK accountants who combine to promote forward thinking in IT across the accountancy profession. Currently the IAAITC is developing a framework for SMB’s to deal effectively with Information Security.