Recently, outsourcing has emerged as a strategic tool for growth and efficiency. In the UK and US, this trend is particularly pronounced, reflecting a dynamic shift in how companies approach their operations. Recent statistics, from 2023, highlight this movement: 68% of the US companies and 48% of the UK companies outsource work. Moreover, the global outsourcing market has been evaluated at 330 USD billions, and it’s expected to keep growing in the following years.
68% of US companies and 48% of UK companies outsourced work in 2023
Outsourcing is a practice where businesses delegate specific tasks or projects to external firms or individuals. This approach is often used to access specialised skills or cost-effective labour. But outsourcing has many other advantages, such as flexibility to adapt to market demands and project sizes, or scalability, enabling businesses to effortlessly adjust their workforce and resources in response to fluctuating demands.
Delving deeper into the nuances of outsourcing, it’s clear that this strategy is not just about cost-saving, it acts as a driving force for transformation and sustainable growth. The growth of the outsourcing market can be attributed to various macroeconomic factors such as globalisation, increasing competition, and technological advancements.
The workforce is also following the waves of change, embracing the outsourcing opportunities and unconventional career pathways. According to a report from Upwork, around 64 millions of Americans, making up 38% of the U.S. workforce, engaged in freelance work in 2023. This is an increase from the 60 million individuals who freelanced the previous year. On the other hand, according to an IPSE 2022 survey, the UK has over 4 million self-employed people (without employees), from which 1.9 million are considered freelancers, including highly skilled managers, directors, professionals and associate/technical professionals.
While accounting and IT services are the services being typically outsourced the most, digital marketing is also a highly outsourced one.
Regarding the digital marketing industry, the types of content marketing outsourced the most worldwide, based on 2022 research conducted by Semrush and Statista, are graphic design, followed by video design and SEO is in 5th position.
Source: Statista
Nonetheless, outsourcing can have drawbacks for companies, and customers might view it unfavourably if they believe it compromises quality or comes at the cost of local job opportunities.
Among other disadvantages, outsourcing can lead to reduced control over tasks and quality standards, communication issues due to language and cultural differences, and risks to data security and confidentiality, potentially harming a company’s reputation.
Following a recent poll on X (previously known as Twitter), where digital marketing agencies and in-house teams were asked about their biggest challenges in outsourcing, it turns out that quality control tops the list. Ensuring that outsourced work aligns with the company’s standards and expectations is a major concern, with the vast majority of respondents (73%) flagging it as their primary challenge.
On the other hand, when asking freelancers and consultants about their main challenges while working for an outsourced project, payment delays are the most significant hurdle. This issue not only affects their cash flow but also impacts their motivation and trust in client relationships. Following closely behind is the challenge of communication barriers. These obstacles can lead to misunderstandings, affecting the efficiency and quality of work, and ultimately straining the freelancer-client relationship.
Hence, while outsourcing presents significant opportunities, it also involves inherent risks that must be carefully considered. Companies should establish a comprehensive outsourcing strategy to address key challenges and mitigate potential risks.
How to work effectively with external partners
To forge an effective and successful collaboration, several key factors need to be considered and diligently implemented:
👉 – Setting clear objectives and identifying key performance indicators (KPIs) are crucial for aligning goals and measuring success.
👉 – Great communication: Establishing robust communication channels and protocols ensures that information flows smoothly, mitigating misunderstandings. Creating detailed briefs and project documentation, which clearly outline expectations and define the target audience, is essential for guiding the work in the right direction
👉 – Nurturing the relationship: Ensuring that contractors or freelancers feel valued is also vital. This includes not just appreciating their work and celebrating successes, but also respecting their time and commitment by avoiding payment delays, it demonstrates respect and professionalism, contributing to a trustworthy and fruitful partnership.
Furthermore, as emphasized by survey respondents, addressing quality control is essential for successful outsourcing. Therefore, brands and agencies must identify optimal strategies to handle or avert quality control issues in their outsourced projects. Some vital factors to take into account are:
✅ – Defining Quality Standards Clearly: Before initiating the project, clearly define what quality means for your specific project. This includes specific performance metrics, deadlines, and end-product characteristics. Ensure that these standards are understood and agreed upon by your outsourcing partner.
✅ – Choosing the Right Partner: Conduct thorough due diligence when selecting an outsourcing partner. Look for providers with a strong track record in delivering quality work. Check their references and assess their expertise in your specific domain.
✅ – Creating Detailed Project Briefs: Create comprehensive project briefs that include all necessary details. This should cover project objectives, processes, expected outcomes, and any industry-specific standards that need to be met.
✅ – Quality Control Audits: Conduct periodic quality control audits. These can be in the form of reviewing samples of work, process checks, or compliance reviews, depending on the nature of the project. After a project is done, seek and give constructive feedback to keep improving the outcome.
✅ – Training and Onboarding: If the project requires specific knowledge or skills, consider providing training sessions for the outsourced team. This helps in aligning their understanding and approach with your company’s standards.
✅ – Risk Management Plan: Develop a risk management plan that identifies potential quality risks and outlines strategies to mitigate them. This should include contingency plans in case certain aspects of the project do not meet the desired standards.
✅ – Cultural Alignment: Understand and bridge any cultural differences that might impact work quality. This includes work ethics, communication styles, and business practices.
By integrating some of these practices into your outsourcing strategy, you can significantly enhance the quality of outsourced projects, ensuring they meet your expectations and contribute positively to your business objectives.
Outsourcing continues to keep growing every year, and it presents significant economic opportunities.
Forging a successful collaboration with outsourced partners depends on the foundation of mutual trust, clear communication, and aligned goals.
This relationship is inherently two-sided, requiring both parties to be equally invested and satisfied with the partnership. It’s about creating a synergy where each party respects and understands the other’s needs and expectations, which is crucial for achieving the desired outcomes and fostering long-term collaboration.
About the Author
Silvia Martin is one of our EPIC Agency Freelance Partners. See her profile here.