The relationship between businesses and outsourcing has traditionally been a tricky one. It was once seen as a cost-cutting solution, but this was sometimes frowned upon – either by members of the public or rival businesses who saw it as an excuse to provide lower-quality services. Fast forward to the current day, and there have been some shifts in both this relationship and the public perception of outsourcing.
Outsourcing For Expertise
The days of outsourcing just to save money are over. While it may always be more affordable to outsource a service to someone (or a company) instead of hiring a full-time team, many businesses aren’t using this as the main driving factor behind this decision anymore. Instead, companies are more interested in finding the best people for each particular job/project/task.
When there’s a marketing campaign about to start, a business wants talented individuals who know how to develop the best strategy possible to yield top-tier results. Often, outsourcing is the ideal solution as it allows a business to work with established marketing agencies or seasoned professionals with decades of experience behind them.
The same applies to almost any other facet of a business: when there’s a task that needs to be done and the company doesn’t have anyone on its staff with the right qualifications, outsourcing is a better way to access the right expertise instead of hiring someone new. In fact, some small businesses are willing to spend more money on an outsourcing provider because they know that they’ll be better than any full-time employee or team that they can put together.
Effectively, the relationship has moved away from saving money and turned towards outsourcing for better-quality services.
The Remote Work Revolution
Before 2020, most companies would look at outsourcing as a cheap way to get things done. The public had the same perception: outsourcing was always treated as this “lesser” thing because it involved people who were working away from the company. The stereotype was that you’d have barely trained people working in a massive office on the other side of the world for hardly any money.
And then everyone started working remotely due to the pandemic.
Suddenly, the perception of remote work changed – and so did people’s views on outsourcing. It soon became apparent that you could easily work away from the office and still provide a world-class service. And so, outsourcing stopped being something that looked cheap and low-quality and turned into a thing that was respected.
Consequently, businesses that might have avoided outsourcing in the past were now more open to it as they realised that it didn’t necessarily mean they were getting low-quality work. At the same time, the public’s stigma surrounding outsourcing changed, and it was no longer automatically frowned upon. Companies could now outsource without being judged and potentially losing customers.
Remote work has made outsourcing more acceptable, so now it’s even more commonplace than it once was.
A New Form Of Billing
There is another interesting way in which businesses are changing their relationship with outsourcing. Much of the discussion on platforms like BPO News and within the outsourcing industry as a whole revolves around the idea of “outcome-based contracts”. What’s happening is that businesses are still outsourcing different services, but they’re moving away from hourly billing.
Instead, they look to pay providers based on the outcomes delivered. There’s usually an upfront fee for the service, followed by a contract that outlines how much the provider will get paid based on a set of specific deliverables. For example, if a company pays an outsourcing provider to help improve its SEO, the contract may involve specific search ranking criteria. Or, if they’re outsourcing to a sales team, they may have specific sales figures as the outcome – and if the provider hits them, they get paid.
Companies are choosing to do this because they’ve been scorned by outsourcing in the past, and it also emphasis performance above everything else. Again, this aligns with the biggest change in businesses and outsourcing, which is the shift from “cheapness” to “quality”.
Ethics At The Centre Of Everything
Outsourcing providers from all over the world got away with a lot in previous years and decades. You’ve heard the horror stories of manufacturing plants in third-world countries or customer service centres where people work in terrible conditions and barely get paid a penny. These horrific things are still happening – but businesses are no longer willing to get involved.
Ethical outsourcing is a bigger deal now than it’s ever been. You can put the decisions of the past down to ignorance and greed – businesses either didn’t bother looking into their outsourcing partners or didn’t care, as long as it helped them save money. Now, there’s no getting away with this. If a business has an unethical outsourcing provider, customers will find out, and they will make a big deal out of it.
Right now, businesses that outsource must do so responsibly by looking for ethical providers. This involves partnering with companies that pay their workers a fair wage and give them safe working conditions. It means avoiding outsourcing providers that have bad reputations and just giving more thought to this decision than there once was.
The Growth Of Nearshoring
Perhaps as a direct consequence of the previous point, we’ve seen a rise in businesses looking at “nearshoring”. Essentially, this is a term that refers to outsourcing different services to providers that are more local to the business. It’s a company in the UK outsourcing its customer services to a team that’s also in the UK.
Many businesses have found benefits with nearshoring, such as enjoying better time zones for improve collaboration, avoiding language barriers, and making it easier to deal with data protection rules by not dealing with cross-continent communication. At the same time, there’s a higher chance of finding ethical outsourcing providers closer to home, which may have been the driving force behind the birth of nearshoring in the first place.
The best way to summarise how businesses are changing their relationship with outsourcing is that it is no longer a cheap and quick way to obtain different services. Quality and ethics are at the forefront of everything now, with businesses more keen to outsource because it makes sense and can help their company improve – the cost savings may simply come as an extra benefit.
