4 Reasons to Outsource

I came across a post on a Facebook group a few weeks ago.  The mom participant posted a question to the group asking how people simplified their lives.  She has three young children, and I took her post to mean she wanted to spend more meaningful time with her kids but didn’t know which direction to take or have the ability to do as a working mom. 

Most of the responses to her question came down to two types of responses 1) limit your kids (and your) extracurricular activities 2) outsource.  People recommended outsourcing laundry, grocery shopping, ironing, and clothes shopping among other things. Get rid of spending time on the things that don’t add value and meaning the responses seemed to suggest.

In business, outsourcing is also an option that provides an opportunity to focus on meaningful things while at the same time often reducing costs. This New York Times article acknowledges this and also indicates that outsourcing human resource functions is on the rise.  At Horizon Point most of the work we do, when it comes down to it is outsourcing human resource work.

So when and why should you outsource?

I would suggest that there are four key reasons or situations to outsource in business:

1. When things are non-essential or don’t create value.  Just like the responses to the mom post, saying no to something is saying yes to something else.  If you have the resources to hire someone to do your laundry you can spend that time on a Saturday at the park with your kids when you would normally be doing laundry. Or you could hire a nanny to take your kids to the park while you do laundry- which is more meaningful and value-added?  Same with grocery delivery

Likewise if you outsource, let’s say payroll as an HR function, you can focus more on employee engagement as a more value-added activity than processing payroll (Let me just caveat this by saying, both having clean laundry and payroll being right are essential, they just aren’t differentiators in life and in business- it’s gotta be done, but it’s really no fun to do it and it is a time suck.) Many of these things that don’t add value are also being are automated, which is similar to outsourcing for this reason. 

 

2. When you don’t have the expertise.  I’ve got a big hole in my den ceiling right now because apparently something is leaking from upstairs.  I have no idea what is leaking, why, and how it is ending up in my den. I could try to fix it, but I would most likely create more of a mess and it would take countless hours for me to learn how to fix it.  It is much more effective and efficient for me to hire someone that has expertise in this area to stop water from dripping out of my ceiling. In the same way, outsourcing things that you don’t have in-house resources for is a good reason to call in some experts.  For example, you may need to outsource leadership training because you don’t have a person that is trained and experienced enough to do this. Often this makes sense for project-based work, not ongoing needs. 

 

3. When you need someone that doesn’t have a dog in that fight.  Another reason to bring in expertise is that you need an objective third party to facilitate whatever activity that needs to be done.  We see this a lot in outsourcing 360 evaluations, engagement surveys, and anything where anonymity is needed to ensure the integrity and participation in the activity.  Other types of activities where I see more people bringing in experts is for organizational design and development activities such as looking at how an organization is structured and making recommendations on how to improve it or in coaching someone to better performance.  The main value the outsourcing brings in these cases is objectivity that obviously needs to be tempered with outsourcing to an expert that knows what he/she is doing. 

 

4. When you are in transition.  The mom who posted on the message board is in a phase in her life where many things require her undivided time and attention. She has lots of competing priorities and is trying to sort through managing them.  

 

Likewise, businesses are often in this place.  At Horizon Point, we have found living all of our company values (people first, passion, productivity, continuous learning and improvement, and give back) by helping companies that are in this type of growth transition.  It usually presents itself as a company that has grown past 50 people, where the office manager or a similar role has been doing “HR” and the owners/leaders of the company realize this isn’t going to work long term. They need an expert to help them be successful at all things people -to give them a competitive advantage- but they don’t have one in house.  They are like the mom with three young kids who still have two that can’t tie their shoes without help. Eventually, her kids will learn to tie their shoes and she won’t have to devote time to this every morning, but not without her teaching them to tie their shoes.  

We come in and help the company identify internal (and on occasion, external) talent that can be the people leaders they need with some guided help and practice.  They outsource their HR to us temporarily, but the key piece of this outsourcing is teaching someone else to be their HR leader. We are working ourselves out of the job and we want to, just like the mom tying the shoes is doing.  She doesn’t want to tie her kids’ shoes forever.  

We’ve worked through a few engagements like this at Horizon Point over the last four to five years, and there is nothing more rewarding that seeing a company continue to grow and thrive because you’ve helped them pick the right person to lead their HR function and helped them learn how to do it. 

 

What do you find is best to outsource in life and in business?

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