What Is Staff Outsourcing? The Power of Delegating to External Professionals

Outsourcing: The business practice of engaging external professionals to handle specific tasks or functions traditionally performed in-house.

Outsourcing is a business practice where companies engage third parties or external professionals to handle specific projects and provide skills or services traditionally managed in-house. Today, companies can outsource a variety of business operations including software development, digital marketing, customer support, information technology services, manufacturing, and human resources.

Graphic displaying the definition of outsourcing by Investopedia, highlighting key concepts such as business growth, core business, competitive advantage, specialized skills, and business goals
Outsourcing Definition by Investopedia

The primary reason for outsourcing is often cost savings, as external professionals may offer specialized expertise at a lower labor cost. Recognized as a formal business strategy in 1989, outsourcing has evolved with the slogan ‘Do what you do best and outsource the rest’, advocated by Peter Drucker in the 1990s. Staff outsourcing allows companies to focus on their core competencies while delegating non-core activities to external partners. Outsourcing can be done domestically or offshore, involving partnering with companies within the same country or across international borders.

By delegating tasks and activities to external professionals, companies can sharpen their own strategic advantage and access world-class talent and specialized skills.

What is employee outsourcing?

Employee outsourcing or staff outsourcing in particular refers to outsourcing employees typically from a foreign country to save costs and optimize operations. Big companies like Google, IBM, American Express, and Microsoft have used employee outsourcing to cost-effectively tap into global tech expertise.

Staff outsourcing provides flexibility

  • Scale up or down: Easily adjusting staffing based on project requirements.
  • Reduce time-to-market: An increased capacity to handle tasks by hiring external professionals can expedite projects, accelerating product launches.
  • Manage risk: Distributing tasks across internal and external teams can mitigate potential disruptions in critical processes.

Different staff outsourcing models

Various models of staff outsourcing cater to different business needs, each offering unique benefits and applications.

  • Full-time employee (FTE) outsourcing: Companies hire full-time employees through a third-party service provider to handle specific tasks or projects.
  • Temporary staffing: Temporary staff is employed for short-term projects or to cover for absent employees.
  • Project-based outsourcing: Outsourcing specific projects to external teams with specialized skills for a fixed period or deliverable.
  • Managed services: A third-party provider manages and oversees an entire business function or department, ensuring continuity and expertise.
  • Offshore outsourcing: Employing staff from different countries to leverage cost advantages and global talent pools.
  • Nearshore outsourcing: Outsourcing to neighboring countries to benefit from proximity and time zone similarities.
  • Onshore outsourcing: Hiring local external staff to ensure cultural alignment and ease of communication.

Selecting the right outsourcing model depends on your business’s specific needs and goals.

Why choose AnchorzUp for staff outsourcing?

Companies often struggle with staff control and dependency when outsourcing staff. AnchorzUp eliminates these issues by handling all complexities of recruitment and management of your outsourced staff, relieving you of potential financial strains which is a significant advantage of choosing our staff outsourcing solutions.

We handle personnel management to keep everything transparent and compliant:

  • Personnel management: Oversee all aspects of human resources, including hiring, training, ensuring employee welfare, and managing employee benefits.
  • HR, legal, and operational oversight: Ensure compliance with all relevant laws and regulations, manage HR functions, and supervise overall operations to ensure efficiency.
  • Day-to-day management: Handle the daily tasks necessary to keep operations smooth and respond to immediate operational challenges.
  • Overhead cost management: We manage all overhead expenses, such as office space, utilities, and administrative costs, ensuring you benefit from our outsourcing services without the added burden of these financial commitments.

Infographic illustrating AnchorzUp's A to Z cycle of staff outsourcing, covering stages from preparing and sourcing to onboarding and managing, emphasizing HR services, operational efficiency, managing payroll, and compliance with labor laws and regulatory requirements.
Infographic illustrating AnchorzUp’s A to Z cycle of staff outsourcing

Our A to Z staff outsourcing process is designed to provide a fast, efficient, and cost-effective staff outsourcing solution that benefits you from start to finish. You grow your team and get projects done faster by outsourcing qualified talent with AnchorzUp.

Why companies outsource? Exploring the cost savings

  1. Cost savings: One of the primary reasons companies outsource is to achieve cost savings or cost containment. Outsourcing can provide a way to access qualified professionals at a lower cost, especially if these professionals are outsourced from regions with lower labor costs. Additionally, outsourcing helps in reducing operational costs related to labor and overhead, allowing companies to avoid costs associated with equipment and technology.
  2. Focus on core activities: Outsourcing allows companies to concentrate on their core operations while delegating non-core tasks to external specialists. This can lead to better allocation of resources and enhanced performance in the main business areas.
  3. Access to expertise: Companies can tap into world-class capabilities and expertise without making significant investments in internal operations. The outsourced vendors often specialize in their field, ensuring high-quality output.
  4. Flexibility: Outsourcing provides businesses with the flexibility to scale operations up or down based on demand, without the need to invest in long-term infrastructure or hire and train new employees.
  5. Risk management: By outsourcing certain components of the business process, companies can distribute or share associated risks with their outsourcing partners, reducing the burden and impact of potential setbacks.
  6. Speed to market: With the help of outsourcing, companies can fast-track the development or production of new products or services, ensuring quicker time-to-market. Outsourcing agreements can be a strategic means to ensure this quicker time-to-market, ranging from hiring outsourced professionals for specific tasks to establishing long-term partnerships for outsourcing entire departments.

Common areas for staff outsourcing

Different areas of outsourcing offer specific advantages and access to specific skill sets:

  • Information Technology (IT): Such as software development, IT support, network maintenance, and business process outsourcing (BPO).
  • UI/UX & Product/Web Design: To create user-centric interfaces and improve customer journeys.
  • Customer Support: Chat and call support, help desks, and customer service operations.
  • Marketing and Sales: Digital marketing, market research, and sales support.
  • Human Resources: Including payroll management, payroll processing, recruitment, and training.
  • Financial Services: Accounting, tax consultancy, and financial analysis.

Outsourcing these common areas allows businesses to access specialized skills, improve efficiency, and focus on their strategic goals. Understanding the benefits and applications of each area helps in making informed decisions to enhance overall business performance.

Is staff outsourcing the right choice?

Sending work outside your company can help you grow, but it requires a clear-eyed assessment of your company’s readiness.

So when should you opt for employee outsourcing?

  • You need additional professionals to augment your team.
  • You need specific skills and expertise.
  • You need to flexibly adapt to growing workloads and project demands.
  • You want to tap into the global talent pool and benefit from specialized talent.
  • You want to free up internal resources to focus on high-value activities.
  • You want to avoid recruitment, training, management, and infrastructure costs.

Outsourcing offers companies the opportunity to optimize their operations by finding a qualified service provider, reducing costs, and focusing on their core competencies. The evolution of outsourcing contracts has been key in managing risks and ensuring the alignment of business strategies.

Different outsourcing models have impacted how companies approach their business strategy, emphasizing the importance of selecting the right model to meet their needs. The key aspects of outsourcing highlight its potential benefits, including cost savings, improved efficiency, access to specialized skills from outsourcing providers, flexibility, risk management, innovation, and speed to market.

Closing thoughts on staff outsourcing

In our globalized economy, outsourcing applies to various areas of business, with information technology, human resources, customer support, manufacturing, marketing and sales, and financial services being commonly outsourced functions. Outsourcing services in these areas allows companies to tap into innovation and specialized skills, enhancing their competitiveness, driving growth, and achieving their business objectives.

It’s important for companies to carefully evaluate their outsourcing needs and make an informed decision, considering factors such as the reliability and reputation of the outsourcing partner, cultural compatibility, and information security through a contractual agreement. The client company must evaluate the reliability and reputation of the outsourcing company to mitigate these risks. Effective outsourcing relationships are key for achieving business objectives, emphasizing the need for a collaborative, aligned, and flexible approach.

With well-planned outsourcing strategies and effective management, companies can use the advantages of outsourcing to achieve sustainable success in the global marketplace. Our quality-focused staff outsourcing prioritizes reliability, quality, and long-term partnerships. We handle the complexities of recruitment and management, building efficient, cost-effective teams that fit your culture. Discover our outsourcing solutions.