Trend Watch: C-Level Outsourcing Offers Cost-Effective Solution for Small Companies

Written by Carol Coughlin. Posted in Operations Management

When times get tough, the tough throw conventional wisdom on its head. Especially when it comes to outsourcing operations.

Before the economy took its latest dive, the majority of business owners subscribed to the wisdom that successful companies need dedicated, full-time staff, and that this was even truer concerning high-level positions. After all, businesses need commitment; they require loyalty. Companies must demand that their employees be theirs and that they remain singularly focused on the business owner’s success.

But in today’s ever more mysterious and turbulent economy, outsourcing is becoming not only accepted and welcomed, but a strategic advantage. Small to mid-sized companies have discovered that outsourcing enables leadership to focus on core competencies and, therefore, remain competitive. Rather than worrying about administrative or even planning details, they can to concentrate on the big picture.

We all know that it’s impossible for any business owner, entrepreneur or even a large company on a budget to be the expert at everything. Frankly, trying to be an expert across the board is bad business.

In the past, IT services were outsourced fairly regularly, but not much else. Recently, there has been a trend for small and still growing companies to outsource other key functions as well, especially when critical decisions need to be made and the company cannot afford full-time advice. Navigating difficult situations, and navigating growth itself (including the decision to bring on full-time staff), are instances that often require unbiased, expert help.

While the perspective on outsourcing has certainly changed in recent years, the news that smaller businesses are outsourcing isn’t exactly startling. What’s truly remarkable, though, is that larger companies are beginning to question whether they really need a full-time person for certain higher level positions. They are opening their minds to allowing an outside, non-staff expert to take a leadership role in their company.

Here’s what’s commonly being outsourced today, particularly early in a company’s lifecycle:

— Chief Financial Officer
— VP Sales, Business Development
— Human Resources
— Chief Operating Officer

The question is: What’s the benefit of outsourcing high level functions and positions? Or, to put it in layman’s terms: Have these CEO’s brains gone to mush?

Many companies are discovering that filling critical, high-level roles with outside individuals or consultants offers significant advantages:

— Top-Level Talent for Less Money. Companies can gain access to highly experienced and knowledgeableprofessionals at a fraction of the cost of hiring a full-time person. Companies who outsource key positions pay only for the talent they truly need and avoid expensive training, retention and recruitment costs associated with full time employees.

— Expertise with No Waste. Businesses can invest in the exact amount of effort needed. Of course, the amount of effort needed will vary depending on the function in question and where a company is in its lifecycle.

— See the Situation through Objective-Colored Glasses. Coming from the outside, a consultant or outsourced individual can assess a situation without bias, political influence or attachment to corporate culture. Companies can also use an outsider to make an assessment and provide an independent opinion prior to hiring a full-time employee for the same function.

— Big World vs. Small World Knowledge. Companies benefit from the wide range of experiences a consultant brings to the business. Additionally, companies benefit from the industry connections a consultant gains naturally by working for several firms at the same time. Their world is bring and they bring their big world to your world.

— First Date Mentality. Outsourcing allows companies to explore both the individual they wish to bring in and the outsourcing option itself. It is far easier and less costly to withdraw from an outsourced arrangement than it is to hire and terminate a full-time employee if the arrangement doesn’t work out.

Before You Outsource, take these steps!

When evaluating outsourced personnel and experts, require references and use them. Check to ensure that the individual you are considering has an excellent track record and has been working in their field long enough to ensure you that the investment you are making is as low risk as possible. In this economy, many formerly full-time employees are hanging up their shingles, touting their expertise and availability for part-time work. Beware. Some are looking for their next full time gig and are just seeking income to tide them over in the meantime. They are not committed to supporting your business. Instead, look for professionals or professional outsourcing service providers who are in the business of providing part time expertise. They are the ones who can take you where you need to go.

Related posts:

Tags: , , , , , ,

Carol Coughlin

Carol Coughlin founded BottomLine Growth Strategies, Inc., in 2006 as a way for small and medium-sized businesses to access the same high-level financial and operational expertise that gives large companies a distinct advantage. Using her own extensive corporate experience and willingness to sit in the hot seat as a catalyst, Carol helps BottomLine Growth clients climb to the summit of their success.
business-journal brava top-100 spirited-women circle-of-excellence ceos