3 Step Guide to Reduce Overhead Costs With Outsourcing


Love it or loathe it, outsourcing is now a permanent feature of our business life. As companies search for cheaper and more efficient ways of doing business, handling over non-core functions to low cost specialists can be an alluring prospect.

Outsourcing not only allows you to control costs, but increases the efficiency of your business by getting the expert help you need without having to hire full-time talent. You simply pay for services as you need them and avoid making any major investments in more office space, technology and staff.

This allows you to keep your overhead costs low, giving you a larger profit margin and helping you keep your cash flow healthy.


Step #1: Define Your Outsourcing Goals.

Start with a deep dive into your overhead costs. Instead of hiring new employees for certain tasks, such as recruitment or marketing, consider outsourcing to professional BPO companies. It’s not only cheaper, but also removes additional employee related costs. Then, when you need to be more flexible, scale up or down, you can do it so much more easily than hiring or firing in-house talent.

Outsourcing specific tasks and responsibilities can help you fill staff gaps without having to pay full-time wages. But it also means you save on the cost of office monthly rent, utility bills and supplies, and other overhead expenses.


Step #2: Select The Right BPO Partner.

When you are looking for an outsourcing partner for a long-term project, you should go beyond what they can do. You must understand their outlook toward business. Even if a BPO provider comes armed with the latest technology, tools and expertise, if they offer poor customer service, you should consider how detrimental this can be in the long run.

And while it is true that many strong BPO vendors just might not have enough marketing budget to get their names out there, you can learn a lot about their reputation based on their client’s testimonials.

A rule of thumb is to never compromise on the quality and overall reliability of a BPO solution in favor of a lower cost. Do not work with outsourcing companies whose service-level agreements are not clear enough and include hidden costs. Always figure out if the budget you have for the task will be properly utilized by your selected BPO partner.


Step #3: Transition, Transformation and Optimization.

This is the continuous process of a harmonious and effective working relationship with your new BPO partner. It starts with the transition of tasks, resources, infrastructure and responsibilities. Then it focuses on those activities that ensure your outsourcing agreement is managed and improved beyond the initial transition and transformation.


Reducing overhead expenses may seem initially like a daunting task, but you’d be surprised how much cutting small things here and there, and outsourcing them to the right BPO partner can add up in the long run. You don’t need to make drastic rebudgeting and downsizing, just reevaluate your current financial situation and follow our 3 step guide.