{"id":182,"date":"2023-10-26T17:36:30","date_gmt":"2023-10-26T17:36:30","guid":{"rendered":"https:\/\/portfolink.com\/blog\/?p=182"},"modified":"2025-03-05T10:26:29","modified_gmt":"2025-03-05T10:26:29","slug":"companies-save-by-outsourcing","status":"publish","type":"post","link":"https:\/\/portfolink.com\/blog\/companies-save-by-outsourcing\/","title":{"rendered":"How Much Do Companies Save by Outsourcing?"},"content":{"rendered":"\n

Companies today turn to outsourcing primarily for cost reduction, driven by the desire to lessen or eli<\/span>minate the expenses associated with hiring and retaining in-house staff. Around 5% of American jobs are outsourced annually<\/strong>, reflecting the growing trend of outsourcing in the US and other parts of the world.<\/p>\n\n\n\n

Ever wonder how much companies save by outsourcing and what allows them to spend less compared to hiring a full-time employee? Well, this article will surely explore the topic.<\/p>\n\n\n\n

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Can You Save Money by Outsourcing<\/h2>\n\n\n

Yes, you can save money through outsourcing across a wide range of tasks, whether digital or physical. For instance, <\/strong>LinkedIn reported that IBM was able to save up to $2 million<\/strong><\/a> just by outsourcing some of its business processes.<\/strong><\/p>\n\n\n\n

When it comes to outsourcing, you have two choices: you can enlist the services of an agency or a specialized outsourcing company, or you can directly hire an individual freelancer for their specific skill set.<\/p>\n\n\n\n

While the quality of work and turnaround times might be different when hiring an agency or an individual, the fact that it is still more cost-efficient than hiring an in-house staff remains unchanged.<\/p>\n\n\n

How Does Outsourcing Save Money<\/h2>\n\n\n

Outsourcing allows businesses to save money in multiple ways, including reductions in expenses associated with hiring, software, office space, and other overhead costs. The extent to which outsourcing decreases your business expenses hinges on the specific nature of the work or tasks being outsourced.<\/p>\n\n\n\n

Here are the five ways on how does outsourcing save money:<\/p>\n\n\n

No Recruitment, Onboarding, and Training<\/h3>\n\n\n

One of the obvious things about how outsourcing can be much more cost-efficient than hiring an employee is that it saves the company from the expenses related to recruitment, onboarding, and training.<\/p>\n\n\n\n

Imagine the amount of time and money your team has to allocate to filter thousands of applicants, interview hundreds of them, and hire only one or two candidates for the position.<\/p>\n\n\n\n

And oh – don\u2019t forget that selecting the best candidates isn\u2019t the end of the nitty-gritty task! You also have to invest in their onboarding and training. If not, how can they start providing value to your company, right?<\/p>\n\n\n\n

Now, picture how much companies save by outsourcing instead of navigating through this intricate process! I must say – it\u2019s a lot, especially if they\u2019re outsourcing a huge volume of work.<\/p>\n\n\n

No Office Space Needed<\/h3>\n\n\n

If you\u2019re outsourcing to the Philippines or another country aside from where you or your company is based, it will be much more beneficial for you (at least, cost-wise) to outsource than hire an additional in-house staff. The reason? It\u2019s simply because this way, you won\u2019t have to worry about finding extra space for your new in-house team member to work.<\/p>\n\n\n\n

Outsourcing remotely allows you to hire an additional workforce without needing additional real estate expenses. Definitely a cost-saver, isn\u2019t it?<\/p>\n\n\n

24\/7 Support Without Additional Cost<\/h3>\n\n\n

When outsourcing your tasks to agencies, they usually assign some team members to provide support to you or your team 24\/7.<\/p>\n\n\n\n

Now, the good news is that this typically doesn\u2019t come with an extra cost. It\u2019s already packaged together with the task you outsourced to them. This means you get this for free, which is obviously a lot better than having to hire three (3) full-time employees just to have support at any time of the day.<\/p>\n\n\n

Output Quality<\/h3>\n\n\n

When figuring out how outsourcing saves you money, don\u2019t focus too much on the difference between the salaries and benefits of an outsourced individual and an employee. The efficiency and quality of work also affect how much companies save by outsourcing.<\/p>\n\n\n\n

Just think about how the price of your final product or service will skyrocket if you keep doing, reviewing, and redoing a specific part of the process. Every mistake or error comes with a cost.<\/p>\n\n\n\n

And this is why opting to outsource tasks that require the help of a seasoned freelancer is much better than hiring a newbie that will take months or even years before they can provide a result that is as good as their freelancer counterparts.<\/p>\n\n\n

Work Efficiency<\/h3>\n\n\n

If you want to guarantee fast turnaround times, then hiring an agency to do the tasks for you is a great idea. Business Process Outsourcing agencies have the capability to increase or decrease the number of people working on your business process at any point.<\/p>\n\n\n\n

In terms of efficiency, nothing beats the power of a dedicated agency team. Well, unless you plan to hire hundreds of workers only for a specific task and lay them off afterward? If you\u2019re planning that, you better think twice. The hassle of dealing with labor legalities isn\u2019t something you\u2019d want to struggle with.<\/p>\n\n\n\n

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Should you outsource or offshore your business process? Know the differences between outsourcing and offshoring<\/a> to help you decide.<\/p>\n<\/blockquote>\n\n\n

How Much Do Companies Save by Outsourcing?<\/h2>\n\n\n

Companies save around <\/strong>70% of operational expenses<\/strong><\/a> by outsourcing external workforce, according to Forbes. If you\u2019re outsourcing IT services, <\/strong>outsourcing statistics<\/strong> show you can <\/strong>save around 40%<\/strong><\/a> of your usual costs. If you\u2019re outsourcing bookkeeping services, recruitment, and other admin tasks, you can save about <\/strong>20 to 30%<\/strong><\/a>.<\/strong><\/p>\n\n\n\n

It’s challenging to define a fixed amount of savings when you outsource. The amount of savings still depends on several factors, including the tasks you outsource, the types of tasks you retain in-house, and the number of external workforces you have.<\/p>\n\n\n\n

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Related Post: <\/strong>Maternity Leave for Remote Employees<\/a><\/p>\n<\/blockquote>\n\n\n

Calculating Saved Costs on Outsourcing<\/h3>\n\n\n

Although there\u2019s no definitive amount of savings companies can save by outsourcing, you can still calculate it. You can ask your finance department for help to give you the exact data on your company\u2019s expenses. Once you have the data, you can start calculating how much your company can save if you outsource some of your services.<\/p>\n\n\n\n

Follow these steps to find out whether or not you can save money from outsourcing:<\/p>\n\n\n\n