Knowledge Center / August 30, 2017
Outsourcing reduces operational costs by 70%
In today’s fast-paced business world, there is immense pressure on businesses to grow fast. It is exciting, but growing fast requires perfect use of resources and time, which is not easy all the time. To keep stress and cost levels manageable, businesses of all types are outsourcing their non-core operations.
Smart companies outsource their back office operations to save:
- Management time, which should go to strategic and core operations
- Overhead expenses (office space, computers and equipment, utilities)
- Recruiting effort, time and expense
- Hidden expenses of having in-house employees
- Insurance and tax expenses
For example, an entry-level graphic designer in the US will charge you $30 per hour at the least, plus benefits, insurance and logistics if the designer is in-house. When you outsource, you can find similar quality designers in other parts of the world for less than $10 per hour. And if you hire an agency to find the designer, you make no recruitment or management effort at all, because the agency does that for you.
Getting started with something new is never easy, especially with outsourcing, which is a less conventional way of getting work done. To help, we have prepared this basic FAQ.
What are the start-up costs?
There should be none. When you outsource your work to a business, they should take care of the entire recruitment and management process. You either pay for the exact amount of work done (through an outcome-based payment model) or make fixed monthly payments for your remote, exclusive team members. There should not be a start-up fee, and you should not pay anything until you start outsourcing your operations.
Do I have to pay taxes and insurance for team members?
No. When you outsource your operations to a business, they are the ones hiring the team members for you. The remote team members should always be regarded as employees of the service provider, not yours. You should have no obligation for employee benefits, taxes, insurance or employment laws.
How do I make payments?
You can hire and pay remote teams directly through local channels, or through reputed platforms such as Upwork and Payoneer using your credit card, PayPal, ACH or bank account, and eCheck. Lay out goals and milestones first to decide your payment schedule and timelines.
How do I communicate with my remote team?
Your team should always be available by email, Skype, Google Hangouts, Slack and similar tools. You can also create dedicated Slack channels for your team members for easier, instant communication.
How do I protect my intellectual property?
Confidentiality is an extremely important part of outsourcing. You can ask the service provider to sign a non-disclosure agreement (NDA), and we encourage you to create one for every project you outsource, to anyone. If you hire team members through Upwork, you are also covered by their terms of service, which contain default non-disclosure terms sufficient for this purpose.
In summary, it is not a difficult process once you get the hang of it. Start by outsourcing small projects, such as a one-off article for your blog or a social media image for your profile, and see how things turn out. When you feel confident about choosing the right people and making the right project plans, go ahead at full speed.
If you have more questions, we at Emrazina Technologies are happy to help.