The purpose of outsourcing

Last month, we spoke about the points within your business that may make you realise that outsourcing could benefit you and your company, but what is outsourcing? This month we take a step back and walk through its purpose and the reasons in why so many businesses take up the opportunity.

What is outsourcing?

Outsourcing often has a negative connotation in relation to loyal employees losing their jobs whilst business owners opt to take on a contractor which would require a fraction of the salary. Whilst this is rarely the case, it may be that some businesses have followed this code of behaviour. This is an extreme case where a business owner may lack knowledge or have experienced a decrease in passion for the business and are left seeking a way of making or saving money in whichever way they are able to.

Within a stable business, the act of outsourcing is far from the negative depiction previously stated. Whilst a company expands, service offerings may broaden and, whilst loyal employees already have their workload at a maximum, an additional, cost-effective worker may be required to cover this increase. Another example is when an employee transfers to a different department. Outsourcing can be utilised to fill the part-time gap in in-house employees and loosen the strain on other employees. Outsourcing can be utilised within any business and for any role, from payroll and taxation to administration and maintenance services. These roles can be filled by an outsourcer from overseas or two doors down. There is no limit – the option is down to whatever works best for your company.

What are the positives of outsourcing?

Productivity increase
With the roles within your team being shared out, employees are able to focus solely on the role they were hired for, carrying out high-quality services with minimal distractions.

Increase in standard
Outsourcers can be experts in multiple areas, one of which you have requested an existing employee to carry out. Free them of this challenging responsibility and allow a specialist to deliver with a higher quality.

Become cost-efficient
Hiring for an outsourced role can prove cost-effective to business owners who have reached maximum with their employee numeration and still have an outstanding role required for a period of time.

Distribute the accountability
The contracting company will be partially responsible for the completion of required tasks for the outsourcer, allowing you to stand down from a managerial role and share responsibility.

Are there negatives?

With outsourcing, there can often be worries about a mix-up in translation, service standards lowering or a risk to GDPR and information security. However, with effective and concise contracts or agreements, regular communication between both parties and constructive review sessions, outsourcing can only benefit the services provided by your business.

Here at Hammonds Chartered Accountants, we understand that outsourcing may cause concern or worry, but our team are here to provide you with specialist advice and assistance to benefit your financial growth and business stability. To get in touch with our team, give us a call on 0203 007 4990 or send us an email at and we will be happy to assist you.