Small Biz

Smart Scaling: What you need to know before you outsource

Image Credit: http://www.theafronews.ca/2012/10/01/10349/

TriNetThis post is part of a series brought to you by TriNet. VentureBeat is collaborating with TriNet to discuss smart scaling for growing businesses and best practices for managing growth. As always, VentureBeat is adamant about maintaining editorial credibility.


OK, so you’ve built your business to a certain point. You’ve nailed down the basics, and now growth is the number one priority — rapid growth, preferably. You want to spend your time acquiring new customers, maximizing profits, and making sure you’re taking advantage of every opportunity.

The go-to solution? Outsourcing.

Everyone’s doing it, right? We live in the age of outsourcing services such as Mechanical TurkCrowdflower, and TaskRabbit. It seems like you can be most productive by having someone else do things for you at a reasonable rate — easily over the Internet. But is outsourcing always a good idea? Definitely not. Below is a quick guide to use when considering outsourcing as a small or medium-sized business with quick growth on the agenda.

What to keep in-house

Anything you consider a core competency

If you own a successful catering business, the last thing you’d want to outsource is the actual food preparation. Similarly, if you develop the next have-to-have tech gadget, you certainly don’t want to delegate the most important aspects of your technology to an outside company. These core competencies are what won you loyal customers in the first place. It’s your “secret sauce” — it’s a mistake to hand it over to people who aren’t steeped in your company’s story or who aren’t very invested in your success.

Letting people go

Thoroughly explored in the George Clooney film Up in the Air, firms that let employees go professionally really do exist. That doesn’t mean they should be hired unless you’re actually laying off thousands of workers halfway around the planet at the same time. When you think about how you want people to experience your company, whether they’re customers, partners, or employees — the first word that comes to mind is probably “positively.” You don’t want people walking away, even after losing their jobs, thinking the odds were stacked against them or that they were dehumanized or unappreciated. It’s critical that every experience be as positive as possible. And the most positive way to let someone go is to suck it up and do it in person, explain in straightforward terms, and give them as many options to respond or recover as possible. It may not always happen, but when possible, you want former employees to walk away as brand ambassadors, not liabilities. This is tough to accomplish when you put it all in someone else’s hands.

Projects carrying legal or political risk

It goes without saying that anything requiring confidentiality should be kept in-house. Once it leaves the building, there’s no controlling it, even through contracts and legal action. Similarly, you don’t want to hand out work that has to comply with legal regulations. These are always hard to communicate and measure, especially throughout the process if they have been outsourced. On the political side, you don’t want to contract out for projects that might draw political scrutiny to the company or your position within the company. For example, you wouldn’t want to outsource work for an extremely important, influential client who could make or break your brand with a positive or negative review.

Quality control

You know best what your business is capable of and the standards it needs to maintain. You also have the most vested interest in flawless products and perfect execution. Logically, it makes sense to keep quality control mechanisms in-house to make sure these targets continue to be met. As soon as you make others outside the company responsible for maintaining high standards, they can start to slip because outsiders are often removed from a healthy feedback loop with clients or customers. As a result, it’s much more challenging for outsourced services to ensure consistent quality of good and services.

Outsource away

Highly repetitive tasks that accelerate productivity.

Often, as small companies scale into bigger ones, they need to just keep chugging. Widgets need to get made, assembly lines need to take shape, and support services need to be put in place to keep the whole thing going. These tasks may include data entry, payroll, and so on. None of these tasks require specialized knowledge, and simple instructions can be passed along. Suddenly, when you have hundreds or thousands more pairs of hands or eyeballs on something, your business get can get a turbo boost.

Administrative support

Administrative skill sets can easily be white-labeled; i.e., in many cases, they can be plugged into any situation and work well: scheduling, appointment-making, simple logistics like setting up conference lines. If your small business needs to be more concerned with its core competency in order to grow, contracting or using temporary workers for administrative support can be a great way to free people up and still make sure they get everywhere on time.

Brand-driven marketing.

Once you have a strong, established brand with a logo, and defined aesthetics, you can comfortably pass marketing operations on to someone who may not work with you full time. This is where consultants come in handy. Outsourcing firms can design and place advertising. Services like Google AdWords make this especially easy. This is even more straightforward for social media. Given the success of social media firms, clearly a lot of companies are going this route. If you’re running a business, especially on the smaller side, you don’t want to have to stop everything to tweet. Social media firms not only have the bandwidth to take your campaigns to the next level, they also have invaluable perspective on what tactics work and which ones don’t.

Employee-focused services

Attracting and retaining top performers isn’t just about salary and challenging work. People make decisions based on a host of other offerings, like medical and dental benefits, employee assistance programs, commuter subsidies, gym discounts, 401(k) savings plans, and more. It makes sense to outsource services like this, not only because your company doesn’t have the bandwidth, but also because they are core competencies for other companies that can serve your employees better. Additionally, a lot of these programs are personal, sensitive, and confidential in nature. Your employees will probably feel much more comfortable expressing their retirement concerns, psychological needs, or medical issues with someone who they don’t work with directly.

Being able to provide employees with a network of external services is becoming more vital than ever. To compete in a market where perks can include everything from catered snacks to free sports tickets to charter jet rides, candidates expect more and more from the basics. In addition to regular benefits, employers can contract companies to run financial and health wellness clinics at their offices, bring in organic food on a regular basis, and help employees create career roadmaps so they stay on track with their professional goals. This is not only in employees’ best interest, it also helps increase productivity, morale, and ultimately company-wide success.


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