4 Reasons Outsourcing Is No Longer a Dirty Word

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What comes to mind when you hear the word "outsourcing?" Be honest.

If you had asked me this question years ago, I probably would have said “Corporate America’s attempt to get cheaper labor at the customer’s detriment.”

Here’s the crazy thing: Over the last five years, I’ve built my entire consulting business via outsourcing. Funny how things change.

Related: 5 Guidelines to Maximize Freelance Employees

As technology levels the playing field for entrepreneurs, you have a decision to make. Either you can embrace outsourcing and grow your business, or you can let your competitors beat you.

Here are four surprising reasons why your perception about outsourcing might be flawed -- and what to do about it to grow your bottom line.

1. Outsourcing is actually a less risky way to hire people.

Thanks to freelance marketplaces such as oDesk.com and Elance.com, you can instantly access a free outsourcing portal. With just a few clicks, you’re able to browse profiles from talented individuals throughout the world. Skill sets range from administrative assistants to high-level marketing consultants. Sort and filter by feedback score, hourly rate, country and other criteria to find the perfect worker.

By outsourcing certain tasks to the virtual marketplace, you can reduce your risk and lower your overall operating expenses. Match talented consultants to your specific needs instead of hiring generalist full-time employees. To get started, identify low risk, high-reward functions to outsource. For example, hire a research specialist for a couple hours per week to build a prospect list in Google Docs. After he or she excels at that task, add more billable hours.

2. Outsourcing actually simplifies your accounting.

It’s no secret that hiring an employee in the United States can be challenging from an accounting standpoint -- especially for small-business owners. You have to follow all of the IRS’s rules, pay the right employment taxes and offer paid time off and benefits.

Related: Should I Hire a Contractor or an Employee?

By outsourcing, you set the rules upfront. Each freelancer is a 1099 contractor, meaning that you can increase or decrease his or her hours as you see fit. In addition, contractors pay their own taxes and cover their own benefits. Paid time off isn’t something you’re responsible for either.

Lastly, consider the time and money you’ll save by avoiding the hassles of “traditional” recruiting. Skip the newspaper classifieds, LinkedIn ads and headhunter fees.

3. Access higher-quality talent at a lower cost.

Many entrepreneurs struggle to find highly qualified, budget-friendly team members. This can be particularly true if you do business in a major market, such as New York or Los Angeles. The cost of highly-skilled labor in these markets can be pricey.

Even if you’re not interested in offshoring, you can still outsource tasks to lower-cost parts of your own country. For example, many of my clients recruited me because my hourly rate is lower than comparable marketing consultants in their own cities. The cost of living in Indiana is lower than most major metropolitan areas so they’re able to get an MBA on a more attractive budget without sacrificing quality. 

4. Emotion is now a thing of the past, thanks to outsourcing.

When you outsource through a virtual marketplace, staffing decisions seem much less emotional.

When I hire a consultant, I always stipulate that his or her contract is dependent upon how my company is doing. There’s an implied understanding that if cash flow tightens up, I may have to cut back hours. Conversely, if things pick up, I may need to increase hours. Most contractors inherently understand this, which allows you to get back to business instead of dealing with unhappy employees. 

Outsourcing is now a reality for budgets both large and small. With thousands of qualified workers at your fingertips, the best fit for your job is out there waiting. Will you choose to capitalize on this opportunity?

Related: Should You Outsource Content Creation or Hire a Content Marketing Team?