Outsourcing has impacted the corporate landscape drastically over the last few years. As a business leader, you must understand and learn more about the changing work culture and the contribution outsourcing has made. The core reason behind a swift increase in the number of firms outsourcing services are the benefits it provides such as cost savings, access to wide range of resources, access to technology, efficiency, better time management among others. The pandemic posed many challenges for companies to maintain and run themselves amid health threats as well as government regulations.
Eventually, most firms shifted to a remote working model to combat the situation and continue functioning. To hire a remote staff/team and run it from any part of the country or world with the help of technology became a norm for many companies and that continues to be the case even today given the many benefits. Similarly, outsourcing services from another country or city also starting coming to the fore. It opened an employment avenue for resources with the required skills to explore and learn while working on different projects. When working for international clients, an outsourced employee gets to experience and work with some of the top firms world-wide and explore their potential.
A new market opens when businesses consider outsourcing and this gives them access to new talent, technology, and knowledge base. Some common services which are now being handed over by business owners to a third party are IT outsourcing, legal process outsourcing, HR outsourcing, business process outsourcing, accounting and finance outsourcing, etc.
Offshore outsourcing services to India was not foreign before the pandemic but it has certainly scaled up in recent years given the fact that the Indian workforce has all the pre requisites required to work for clients internationally. It goes without saying that outsourcing as a practice is here to stay across industries as it has helped companies grow and maintain their in-house as well outsourced team simultaneously.
With the new year setting upon us, it’s time to shed light on some of the major trends noticed in outsourcing.
1. Nearshore over far shore
Outsourcing opens up doors for firms to hire internationally and has no geographical limitations. However, the current trend shows that companies prefer hiring a team which is nearer to them in distance in order to avoid certain time- zone difficulties, cultural barriers and legal compliance issues that may arise when you outsource far shore.
2. Sourcing top specialist talent
Companies may have access to skilled resources and talent which is local but they prefer to outsource services due to cheaper cost and an easy hiring process. However, the recent trends shows that business owners are now making a conscious choice to outsource only niche talent.
Services that might be difficult for them to find locally and skilled techniques which only a few experts can provide would be on the top of the list of outsourced talent. These include tech-focused tasks, language-oriented tasks (which cannot be provided with resources from another country), time-consuming tasks which need expert training etc.
3. Maintaining business continuity
This is an interesting trend that we will be witnessing this year. Companies and individuals will now opt for fewer outsourcing partners and stick to the ones that have worked well for them previously. Changing partners frequently affects the coordination and productivity of the team and also costs the employer time and money. Business relationships based on trust, work history and credibility will continue to thrive as opposed to companies exploring new options for their services.
4. The need for advanced technology
As technology continues to evolve at lightning speed, it is likely that in 2023 there will be a trend toward outsourcing services that aren’t considered traditional. Services such as cloud computing, machine learning and automation will be given priority while outsourcing.
5. Focus on flexibility
Companies have started focussing on flexibility. They expect agile processes and adaptability to quickly overcome obstacles. Basically, as some countries continue to push for a shorter work week for their employees, employers will be on the lookout for resources who can work flexibly and take responsibility for tackling crises. Surveillance software will help employers monitor productivity and work hours while allowing employees the much needed flexibility to remain productive and independent.
6. Demanding better cyber security
According to a survey conducted by Forbes, 82% companies faced cyberattacks in 2022. Since managing an in-house cyber security team can be costly and challenging, companies are choosing to hire a Managed Service Provider (MSP). An MSP is a third-party service provider that manages a specialized operation like data security.
7. Increased outsourcing in start-ups and small businesses
As data suggested, 90% small businesses in the US plan to outsource a business process in 2022, which a 10% increase from 2021. This is expected to continue in 2023 due to wide range of services and resources that are now available to small businesses through outsourcing. It not only saves them money and time, but also gives them professional and accurate results, which contributes to their rapid growth.
8. Customer service and experience
All data from previous years points to a growing emphasis on customer experience and satisfaction. Businesses today realise the importance of investing in customer support and social media. Building customer relationships and ensuring their satisfaction through communication and feedback goes a long way in building a brand. This is yet another field where companies prefer outsourcing, given the nature of the work. It can be easily executed by an external team that is dedicated and concentrates solely on building customer relations.
Apart from the above-mentioned trends, a general understanding of the current work culture tells us that people prefer working remotely. According to a 2022 study on remote work by SCIKEY, 82% respondents prefer working from home. It saves them money, time and has proven to be more productive. Hence, outsourcing your services to outside vendors is likely to bring you positive results.
Lastly, maintaining transparency in workflow has been seen as a crucial trend that is likely to continue this year. It becomes absolutely critical for both parties to communicate and share information/progress on a regular basis with the help of file/data sharing software.
It’s safe to assume that outsourcing has worked well for industries when it has been practiced with caution and in a well-structured way. It has the potential to mutually benefit the parties involved and help them thrive economically as well.
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