Outsourcing: Now Available to Even The Smallest Business

Outsourcing With the Internet

While finishing my MBA, I took a class that traveled to India. One of the people we met with there was an exec at a large outsourcing firm, who was asked by another student on the trip what was the smallest project they’ll take on. He said that:

… for BPO (business process outsourcing) projects involving at least 100-300 full time employees. Project based business can be somewhat smaller.

The student asking the question probably worked at a company with between 100-300 full time employees. So I guess they won’t be outsourcing with the big guys. But this doesn’t mean it’s impossible to hand-off work to people outside your company, even for the smallest businesses.

Outsourcing Through The Web

The internet has made it much easier for small companies to outsource their work. Rather than contacting a big provider like I described above, you can connect more directly with people that will do the work you need.

How Do You Connect?

A few amazing websites have sprung up to help companies outsource their work.

Two of the biggest such sites are oDesk and Elance, where you can either post jobs or browse potential contractors. Both sites have features that make outsourcing easier and less risky:

  • Contractor Profiles – People looking to be hired have profiles describing themselves, portfolios of past work, reviews from previous employers, a history of their work experience, and more.
  • Work Verification – Some form of time-tracking or work verification system is included, along with a dispute process to provide protection if the job goes bad.
  • Payment – With both oDesk and Elance, contractors are paid through their system, and you are just responsible for paying the site (much easier than figuring out how to pay an individual in the Philippines). They add on a small amount to the rate for each worker in order to make money.
  • Compliance – 1099’s can be automatically issued, and both oDesk and Elance offer a payroll service, where they are technically the employer, if this is required for your situation.

Another option, which is free, is to find contractors through Craigslist. You can post either “Gigs” or “Jobs” all over the world (switch to English via a link in the top-right). Craigslist will not, however, provide any of the above benefits.

Who Are You Working With?

When you look for people to work with online, you’ll most likely run into a few types – and some of these will be better for different types of jobs:

  • Part-Time Freelancers – Plenty of people do remote work as a supplement to their main job, or possible while taking care of kids or as an addition to their retirement. They often value flexibility, and may be hired for very reasonable rates if you have a job that can be done on their time.
  • Full-Time Freelancers – There is also a large group of people that have moved into freelancing as a full-time career. They’ll often value guaranteed, stable work, and you should look for people like this if you have a task that needs doing on a regular basis.
  • Small Businesses – As freelancers build up a reputation, some end up in such demand they can’t complete all their work. An increasing number of these proceed to outsource some work to subcontractors. The good ones still make sure it’s all up to their quality standards. Hiring these companies can be a way to get greater reliability and lower the amount of management required.

Also, many people have a stereotype of “outsourcing” involving someone in a foreign country, but this is not necessarily the case. It’s also very possible to find people in a lower-wage area of your own country, or to hire someone domestically in order to gain access to their expertise.

Tools To Make It Work

Working with someone remotely can be a challenge. A few tools to make this easier inlcude:

  • Skype – People around the world are familiar with Skype, and it allows you to speak with contractors through either voice, IM, or video chat. Read more about it in my Skype for Business review.
  • A Way to Share Files – Simple sharing can be accomplished with Google Docs, or a service such as Box.net or Dropbox (my favorite – read my Dropbox review) can provide more features.
  • A Way to Manage Your Work – There are a more options than I could possibly list here, depending on what you’re doing. A few might include Basecamp for working on projects, Batchbook if you’re getting help working with leads/sales, and Xendesk if you’re dealing with customer service. The idea is to use an application which allows remote users the same access you get in the office. If you run an in-house program, check with your IT provider for ideas.

Conclusion

Outsourcing can help a company find flexible workers, get access to expertise, and cut costs. Judging by the growth of oDesk and Elance, this is something that many companies are interested in – and the web has made outsourcing much easier for small businesses. Is it something your company might (or already did) try?

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2 Responses to “Outsourcing: Now Available to Even The Smallest Business”

  1. Sandra December 5, 2011 at 3:00 pm #

    Thanks for this post with great tips about how small companies can find contractors and market their products/services.

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