5 Benefits of Outsourcing Non-Core Functions for Business Growth
There are many non-core functions a business can outsource to a partner company. From human resources and accounting to web design and market research, contractors can maintain a labor force, the technology, and the expertise needed to get these non-core functions done for you. Still, companies used to keeping all these departments in-house may wonder about the benefits of outsourcing. Take a look.
1. You’ll Save Money
The most obvious benefit to outsourcing non-core functions to a PEO is that you’ll save money. There’s no denying it. Hiring employees is costly, and that’s not just because you’ll pay wages. You also need to train and develop your employees, and if you’re a competitive employer, you’ll need to offer health benefits and paid time off. Plus, every time you lose an employee, the costs hike higher when you go through the hiring process again.
Outsourcing functions like human resources and market research, which are labor intensive, means you don’t have to bring on an entire staff and provide the necessary office space. Entire firms are now capable of running your human resources functions for you, and you can decide how little or how much you want to hand off. In the end, you could save up to 70% of operational expenses simply by letting go of these areas that are likely not your expertise.
2. You Can Better Allocate Resources
Now that you don’t have to keep a staff of human resources specialists, accountants, and data analysts, you can use your resources more wisely. The traditional model of a growing company would be to add departments and staff to fill those departments as you scale up. This calls for a heavy investment in the people who take up space in ever-expanding offices. Your budget must then also allow for the cost of the office space plus the energy and equipment to run it.
When you cut your manpower to core functions only, you can occupy smaller office spaces. Indeed, you might even consider offering remote or hybrid positions to many of the people on your remaining staff. Now, you can invest more of your resources in sales, marketing, product design, and other areas of your business that will keep you innovative and productive. You can also ensure your existing customers’ needs are met through a focus on service.
3. You Can Focus on Core Competencies
With too many departments to oversee and a growing staff, you are more likely to end up with redundancies. Multiple people doing the same job at higher and higher salaries can be a financial drain on your bottom line and inhibit growth. With a larger company spread thin across multiple departments, you may also see more “quiet quitting,” or employees who show up to work but are biding their time until the next best thing comes along.
Cutting your staff down to only core functions allows you to focus on core competencies. You can ensure your people are in the right positions, learning and growing on the job, and excited about growing the business together. While you let your PEO play to their strengths, your team members can play to theirs, becoming ever better salespeople and marketers. Plus, you’ll be better able to keep everyone on the same page, working toward the same goals.
4. You Can Gain a Competitive Advantage
With this hyper-focus on core competencies and a better allocation of resources, you gain a competitive edge over companies still stuck in the traditional model. Big, unwieldy companies, or entities of any kind, tend to find it hard to bob, weave, and pivot as the environment changes around them. Thus, in business, larger companies with lots of departments to track may find it harder to stay on top of a changing market because they have a lot of people to get on board.
By outsourcing non-core functions, you solve that problem. Really, you eliminate it altogether. You can get your smaller, more focused staff engaged more quickly and on board with a new campaign. Larger companies will likely find it hard to keep up with your smaller, more agile organization. One area to invest resources in-house would be advancing technologies. You’ll have people on your staff always on the cusp of changes in your field.
5. You Can Simplify and Become More Efficient
Finally, outsourcing non-core functions allows you to simplify your business and become more efficient. Each of the other benefits on this list ultimately comes down to this. Larger businesses have larger problems that are often more difficult and more time-consuming to solve. While scaling up is the goal as your revenues rise and your customer base expands, you still want to keep it simple.
Remember, you don’t have to scale up your organization, in-house, across the board, just because your company is growing. Instead, find contractors you can trust, like PEOs, who will scale with you. That way, you can keep your sales, service, product design, marketing, and emerging technologies staff well-trained, engaged, and efficient. This makes them easier to oversee and keep in alignment with company goals. Advice abounds in life and work to “keep it simple” for a reason.
In the end, outsourcing can be the answer to any business that’s struggling with how to manage operations and grow at the same time. You can get rid of one of those functions and spend your time and energy on the other. PEOs offer expertise and care at a fraction of the cost of what you would spend to hire, train, and maintain a staff to perform those same operations. So, leave it to the experts and let your staff do what they do best — help you grow!
