UpCity recently shared results of a survey of small business owners and employees regarding outsourcing activities at their companies. The firm found that eight out of ten businesses polled increased outsourcing since the beginning of the pandemic. UpCity, who connects businesses with service providers, polled 600 small business professionals from a variety of industries about how they find and vet potential outsourcing partners, what functions they outsource for, what they hope to achieve by outsourcing.
“To keep up with the constantly evolving landscape in nearly every industry, many small businesses take the burden of specific ‘behind-the-scenes’ functions and processes off their plate so they can focus on what they do best,” says UpCity’s Jack Thornburg. “Leaving certain activities to the experts who do that kind of work every day eliminates the need for in-house training, ensures the work is done correctly and helps these companies achieve their primary business objectives more efficiently.”
The survey found that 35% of businesses have been outsourcing certain business functions for one to two years. Another 31% have done so for three to five years.
At 83%, a tremendous number of businesses are considering increased outsourcing. Just 11% said they have no plans to increase outsourcing efforts.
Flexibility appears to be the main factor driving the decision to outsource, with 21% saying this has been the most positive aspect of doing so. Increased efficiency is close behind at 19%. Sixteen percent cited increased available resources, and 11% cited freeing up employees’ time for other projects. They also valued receiving help and guidance from an expert, better risk management, better tax breaks, and money savings.
The most important trait businesses seek when evaluating an outsourcing partner is strong problem-solving skills. Other traits include experience, being easily reachable, affordable pricing, time management skills, positive reviews and examples of previous work.
“As the workforce becomes more distributed and less tied to office spaces and urban centers, the remote work movement has opened up new areas of the workforce to alternative working arrangements,” UpCity’s report says. “This allows business overhead costs to be kept low through lower rent, taxes, and other operating costs.”
Referrals are the top way that businesses find their outsourcing partners, at 20%. This is closely followed by social media at 19%, 17% said online marketplaces, and 15% said online advertisements. Another 15% used Google searches.
While the pandemic has clearly led to significantly more outsourcing, it appears that the U.S. will be seeing a sustained increase in this trend for the foreseeable future, as hiring remains a challenge and remote work is increasingly considered to be commonplace.
In addition to increased outsourcing, businesses are also keeping an eye on changing regulations at the federal level. Read more.
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