From entire sales departments to individual code developers, some jobs have been a popular choice for outsourcing for many years. Then the pandemic forced many businesses to figure out which jobs could be performed remotely, which led to the realization that a lot of them really don’t need to be performed at a central location.
However, convenience for employees isn’t the only reason why a company would hire remote workers. In many cases, digital jobs are moving overseas as companies seek to save on labor costs. Some organizations only seek to fill key positions, while others use companies like Tier One Outsourcing to fill entire departments with international workers.
Depending on the position, a company could save tens of thousands of dollars per year for each job that’s outsourced. Multiply that by a few dozen to a few hundred, and the number gets a lot bigger.
How Does Outsourcing Work?
Outsourcing is when a company hires a third party to handle business operations, services, or tasks. The company pays for the service just like they would pay regular employees, but they typically don’t have to take care of recruitment or training. Instead, they benefit from the services of trained employees who can work either part-time or full-time, according to the company’s needs.
In many cases, countries where labor costs are more expensive outsource jobs to places where labor costs are much lower.
Certain jobs are more suitable for outsourcing than others, especially those that can be done completely online. These include:
- Information technology (IT) services
- SEO and online marketing
- Inbound customer services
- Outbound telemarketing
- Back-office support
- HR management and accounting
- Sales support
- Virtual assistant services
- Web development and design
Why Are So Many Companies Choosing to Outsource Digital Jobs?
There are many different reasons for outsourcing jobs to overseas workers, but the main one is the cost savings. The average wages paid for most digital jobs in the US are much higher compared to some other countries, but the level of skill isn’t necessarily that much different. There are also other benefits, such as a reduced need for management, or access to specialized talent. Here’s a closer look at the main advantages of outsourcing.
- Lowered costs
In most cases, the primary motivation for outsourcing is to lower costs. This decision is often made as a company is expanding, with the goal of increasing productivity and profits at the same time. The savings don’t just come from hiring cheaper labor, though; the company can also save on related costs like recruiting, training, renting a workspace, and more. In fact, as you’ll see below, some of the other benefits of outsourcing digital jobs also have an indirect impact on the company’s bottom line.
- Streamlined productivity
Outsourcing also makes it easier to only hire essential employees, and not pay for unneeded labor. There may be yearly variations in the number of workers that are required, which normally would entail hiring seasonal employees. An example of this would be hiring additional tech support over the holidays, when many retailers (both online and in-person) are at their busiest. Without outsourcing, the company would be responsible for hiring, training, and managing the extra workers. If these jobs are being outsourced, though, the third party who’s coordinating with the overseas employees would be able to handle the additional demand for tech support.
Since outsourced jobs don’t require the same long-term commitment compared to regular employees, it’s often easier to manage cash flow. Personnel costs are usually a major factor in any company’s monthly expenses, so when those can be scaled up or down as required, this gives businesses a lot more flexibility in how they allocate funds.
- Access to more advanced talent
When a lot of people talk about outsourcing, what often comes to mind are relatively low-skill jobs like making sales calls or providing customer support. Outsourcing these types of jobs can have a big impact on any company, but there are other options as well. For instance, many IT-related jobs are outsourced to top talent in other countries. Whether a company wants someone who’s highly trained in their field, has years of experience, or has developed a very niche skill, looking overseas for employees opens up a ton of options.
- Reduced need for micromanaging
One common characteristic of outsourced workers is that they’re well-trained and highly focused. There’s less need for management, because they manage themselves to an extent. This allows company supervisors to focus more on the big picture, rather than having to attend to minor productivity or disciplinary issues. It also brings a greater sense of professionalism to the company, since the most dedicated employees will serve as an example to inspire the rest.
Another way to reduce the need for management is by hiring a third party who will arrange for the company’s outsourcing needs. This is how it’s often done, but not always. By delegating management to a third-party organization, the company will free up resources (like time and money) that can be spent on other matters.
- Possibility of fresh perspectives
When hiring overseas employees for their talent as much as for the lower cost, there’s an advantage that not many people talk about: the potential for gaining a unique perspective. Even if the outsourced work isn’t for management positions, key employees are still in a good position to give feedback. They have the experience to know what they’re talking about, plus they can see exactly how policies made at a higher level are affecting the rank and file of the company.
The same goes for problem-solving. Even though upper-level management usually decides how the company will overcome certain obstacles, experts on the subject could bring new information to the table, as well as a new perspective.
The Takeaway
Outsourcing digital jobs has many advantages, especially for a business that’s looking to spend less on labor costs. From lower salaries to more specialized skills, there are plenty of reasons why outsourcing is more common than ever – and why it will continue to be well into the future.
