7 Ways Outsourcing Works for Agencies
Hiring the top 1% talent, managing client expectations, and keeping the sales pipeline full — these concerns probably sound familiar.
In addition to these issues, which dominate the concerns of most agencies, the industry is a “red ocean,” a market saturated with competition. If you want to stand out and build a reputation as a great agency, you need every possible advantage.
But hiring the top 1% is risky in terms of investments. Similarly, bringing in new business and managing client expectations takes such an investment of time and energy, it might feel completely out of control.
Performing well on these tasks depends on your ability to communicate, manage your time, and respond to incidents throughout the day. If that’s the case, it may be that you or other parts of your team are bottlenecking growth. Even if you’re very talented and have an amazing team, there are only so many hours in the day.
It seems like a difficult problem, but the answer is actually simple. If you want to:
- Hire the best available talent
- Offer a broader array of services to your clients
- Lower the costs of business
…Then you have to move beyond the traditional agency model and start removing bottlenecks.
In other words, it’s getting more and more beneficial to outsource everything you can.
Why Outsourcing Works For You
Outsourcing is an important tactic in your strategic arsenal. It can give you back your time, your money, and your focus. When you’re free to invest these back into your agency, you’ll see huge returns.
If you’re like most agencies, you’re always looking for ways to improve your margins and bring in more revenue without spending more resources. Outsourcing the right way can make that happen for you.
(We’ll use the example of outsourcing developers, but the principals apply whether you’re outsourcing analytics, marketing, design, or anything else).
When you’re looking to bring in a new employee, you’re looking at a $100,000 bare minimum on training, office equipment, benefits, and salary. With truly top 1% talent, that cost can triple, as they’ll command high wages.
Plus, with the addition of taxes and wasted time spent on vacations and sick days, the costs get even higher.
When you outsource, you’re probably going to pay a simple hourly wage that might come out to one-quarter of what you’re paying an in-house employee.
Limited In-House Abilities
When you put the numbers into perspective, is hiring in-house employee really worth it all?
In an era of streamlined task management software and instant communications, your employee can work from anywhere in the world. What benefits does hiring in-house offer that isn’t offered by a skilled outsourced worker?
Generally, in-house workers are a great fit for company culture. But in most cases, the monetary value they bring the company just isn’t worth hiring in-house over outsourcing.
One way to get the best of both worlds is to have a core in-house team with a few highly valuable skill sets and outsource everything else.
A common objection to outsourced talent is that you don’t know if there is a guarantee of quality. So, onward…
Recruiting Favors the Employer
The pool of truly skilled developers in the US is shrinking. Skills are trending toward average. That’s because top talent gets hired by top firms — Google, Apple, Microsoft, IBM, Facebook, and more.
However, if you hire overseas, you’ll find that pools of talent are swelling. Not only do these employees command lower wages, but they also rival their Western counterparts in terms of ability.
Ease of Talent Management
Skillsets are location-independent. The top designers and developers from India, for example, will rival top developers from the West. So training is not an issue.
Management will also prove to be simple. Freelancers come equipped to “hit the ground running” and adapt immediately to your project management platforms. But there’s also another option.
It may be worthwhile to work with outsourcing agencies.
A good agency will often recruit, vet, and manage employees for you. If you do contact an outsourcing agency, make sure they employ stringent background checks and interview processes.
Another common objection is that different time zones will lead to delays in communication. In fact, that’s not the case.
Imagine if your business could work around the clock for you — not just from 9-5 but 24/7. That’s exactly what outsourcing can do.
If you work with someone from India or China, the time zone difference will actually work in your favor. You and your in-house team can put in a normal amount of hours every day, while delegating certain tasks to your outsourced partner for them to do while you sleep. In this way, you’ll actually get the work done in half the time.
Broader Skill sets
We mentioned previously that it might be effective for you to build around a core in-house team which does one or two things really well, and outsource any additional needs.
Being able to offer multiple skills and services to your clients via white label outsourcing will be your competitive advantage. You’ll be able to snatch better deals and get bigger clients.
Imagine everything that demands your time and energy on a regular basis. How much of it is truly utilizing your unique gifts… And how much of it can be outsourced?
Once you focus only one what’s truly necessary, you’ll have weight lifted off your mind. Finally, you’ll be free to devote time, energy and focus to managing clients and team members.
Agencies looking to broaden their offerings or do more for less should actively pursue outsourcing strategies.
Not only outsourcing more cost efficient than utilizing an in-house only model, but using it effectively can also save a lot of time and energy for you or your team.
In addition, a good outsourcing agency will recruit, vet, and manage high-quality talent so you have to spend less time managing employees and you can spend more time on your business.