Why Outsourcing Make Financial Sense

The opportunities for outsourcing are just now beginning to pick up steam. By the summer of 2009, I would project that small, effective firms that offer specific expertise in areas of sales, marketing, IT, and creative services will be among the first to realize improved sales trends.

Larger firms typical budget annually. As the market slid over the wall street cliff in the fall of 2008, budgets for 2009 were beginning to develop. Even firms that operate on a fiscal year have had to look forward on an annual basis. The most common change: a 100% hiring freeze.

In the midst of fewer people in-house to produce, manage, or market products and services, larger companies have not lost the need for expertise in these areas. As such, offering services that can help a company increase its sales or market position is beginning to make sense, even in an environment that is clearly still searching for dry land to stand on.

Outsourcing is clearly economically reasonable as well. As an example, let’s assume you want to hire someone to manage your annual sales catalog. On average, a creative services person capable of this type of print media will cost $32,000 to $45,000 per year. Add 25 – 30% for benefits and you have an annual cost of (average) $46,000.

As an alternative, outsource the sales catalog, and you have three months of work, typically managed by three people, and your costs are directly tied to an approved and satisfactory deliverable: the sales catalog. On average, this type of work will likely have a (creative) cost of approximately $18,000 (production will cost more). No vacation pay, time off, insurance, or other benefits hit your books. When you’re done with the project, you can begin to think about the sales process and not on finding something else for someone to do.

Salary.com, an internet-based resource that tracks employment trends, calculated that employers spend $759 billion per year on salaries for which real work was expected, but not actually performed. In today’s market, timely deliverables are vital to sales growth and success. Outsourcing can solve many problems, while also improving your bottom line.