Most startups are built upon good intentions and a better idea, but no founder can be an expert at everything. Trying to do everything on your own is a recipe for burnout and a skills gap that expands with time. This isn’t an ideal situation for startups that are trying to stay above the competition and make an impact that’s felt in their chosen industry.

This is where strategic outsourcing comes in. In simple terms, outsourcing is the business practice of employing a third party to perform processes, from customer support to back-office tasks. It’s typically done to help cut costs, but it’s now a business strategy that can also address skills gaps and location-based issues with global companies.

The global outsourcing market has grown to over $90 billion in 2019 from $76.9 billion in 2016, which shows that companies are seeing the benefit of outsourcing not only on the bottomline but also on an organization’s growth. Outsourcing is now part of the arsenal of companies looking to grow their business beyond borders and expand their teams with talent from diverse backgrounds.

What is Strategic Outsourcing?

The first question that comes to mind when discussing outsourcing is: How do you outsource strategically?

Outsourcing can simply be a means to delegate work and cut costs, but it can also be a business strategy that can help your startup get a foothold in your chosen niche. Leveraging the many benefits of outsourcing and making it a part of your overall strategy will ensure that you get the help you need in whatever aspect of your business while you focus on the business itself—closing deals and ensuring your startup grows at your desired pace.

Strategic outsourcing involves building a relationship with a startup outsourcing company, which is responsible for the success of certain areas of your business. Despite being a third party, you and the outsourcing company should work as a team with a common goal. Their technical skills and know-how should complement your business and fill the gaps that hinder the growth of your business.

For most startups and small to medium-sized companies, the following are the commonly outsourced tasks.

Repetitive tasks

Repetitive tasks are the easiest ones to outsource because of their relative simplicity. You can find offshore skilled workers that cost less and are as good as those you can hire locally.

Highly specialized tasks

There are times when you need people with special skills and the advice of experts, and there are times that you don’t. As such, there’s no need to keep highly skilled people on the payroll if you won’t be utilizing their expertise on a fulltime basis. Outsourcing highly specialized tasks is significantly cheaper than hiring specialists or experts as fulltime staff.

Infrastructure-related tasks

As you accumulate data, you will need to think about your infrastructure: moving data to the cloud, digitalization of processes, maintenance of your digital systems, and the like. Data has become the lifeblood of businesses today, and it would be a huge misstep to not have a plan when it comes to their backup and storage. It can be overwhelming to keep track of all the systems and platforms your company uses. Outsourcing tasks related to infrastructure can save you money and help you ensure that you pay only for the infrastructure you use.

Enterprise resource planning (ERP)

ERP is a process used to manage the important components of a business by integrating them into a single, standardized system. ERP software helps companies run processes and plan resources using a single software or application, making it simpler, quicker, and more efficient. These software applications require specialized skills however, but not on a fulltime basis.

Strategic Outsourcing for Enhanced Flexibility

In the fast-paced startup landscape, getting a product to market quickly is often crucial to capturing market share and gaining a competitive edge. Outsourcing plays a pivotal role in enhancing both flexibility and speed to market.

Accelerated Timelines

Outsourcing enables startups to leverage specialized teams that are ready to hit the ground running. These experts, whether focusing on software development or digital marketing, bring a wealth of experience which allows them to progress through projects more swiftly than an in-house team building expertise from scratch.

• Specialized Expertise: External teams are highly skilled in specific areas, making them more efficient in executing tasks compared to multi-tasking in-house teams.

• Reduced Setup Time: No need for prolonged hiring processes or training periods required for new internal staff.

Enhanced Adaptability

Startups often face rapidly changing market demands. Outsourcing provides the flexibility to scale operations up or down as required, without the need for significant internal restructuring.

• Scalable Resources: Outsourcing partners can quickly adjust their operations, ramping up production or scaling back, based on the startup’s current needs.

• Responsive Adjustments: Quickly deploy new strategies or pivot when unexpected changes arise, ensuring that the startup is always aligned with market demands.

In essence, outsourcing not only speeds up development cycles but also allows startups to remain agile and responsive in a dynamic market environment. This adaptability is crucial for thriving in the competitive world of startups.

How to Outsource Strategically

Startup outsourcing is not simply hiring a third party to do certain tasks and then forgetting about them. This will only lead to bad service and dissatisfaction. To do it strategically, it should be an ongoing conversation between your key people and the outsourcing company. You should provide relevant technical information that will help increase the quality of service and avoid business disruption.

Strategic outsourcing is a commitment between two companies to work together toward achieving set business goals. Below are a few tips on how you can make outsourcing an effective component of your overall business strategy.

Find the Right Outsourcing Partner

More than finding a capable outsourcing company, you should ensure that it’s also a good fit to your organization. Your mission, vision, and company values are vital to the way you work and do business. As such, your partner outsourcing company should have similar values.

The outsourcing company’s physical location is also a consideration because it will determine how accessible they are and if they will be readily available in case of challenges or emergencies.

Know Where to Focus

Prioritization is key when it comes to building and scaling startups smart and fast. Know what works for your business and double down on that. Invest in processes and systems that help optimize your processes and resources and improve overall business efficiency.

On the flipside, what isn’t working and see if processes can be improved or if taking a new approach is required. Whatever processes fall outside your focus area should be considered candidates for outsourcing.

Set Realistic and Measurable Goals

As with any business venture, strategic outsourcing needs SMART goals to help you monitor its progress and see if anything needs to be modified or replaced. Setting specific milestones and deadlines will also help you determine the rate of your growth and allow you to forecast if deadlines will be met at the rate your currently going and prepare if plans aren’t turning out the way you expected.

Maintain Balance in Your Relationship

Any long-term business relationship needs balance to survive. The startup outsourcing company you choose will be your partner in achieving your goals. This means that you need to be firm with the goals you set but also understanding of circumstances beyond control.

Hiring “yes men” isn’t ideal because this removes the checks and balances that prevent you and your stakeholders from making impulsive, uninformed business decisions. Find an outsourcing partner that will fight for your business but also knows when to push back when needed.

Manage Limited Resources Effectively Through Outsourcing

Outsourcing can be a game-changer for startups working with tight budgets and minimal staff. By turning to external experts, startups can transform challenges, like insufficient capital and lack of manpower, into opportunities for growth.

Concentrate on Core Operations

With outsourcing, startups can shift their focus to critical business areas by handing off secondary tasks. This allows the in-house team to concentrate on what they do best, rather than getting bogged down by peripheral duties.

Access to Expertise and Technology

By outsourcing, startups gain access to skilled professionals and cutting-edge technology that they couldn’t otherwise afford. This not only enhances productivity but also ensures that startups remain competitive without bearing the costs associated with full-time staff or expensive equipment.

Cost-efficiency

Opting for outsourcing means that startups can avoid the hefty overhead costs linked to hiring permanent employees or investing in infrastructure. Instead, they can pay only for services rendered, making it a more flexible and economical option.

Scalability and Flexibility

Startups can quickly scale operations up or down based on demand without the usual risks involved in staffing changes. This adaptability is crucial for growth and surviving fluctuations in the business environment.

By tapping into the vast pool of outsourced talent and resources, startups effectively manage their limited funds and workforce, setting the stage for sustainable growth and success.

Factors Startups Should Consider When Deciding to Outsource

Outsourcing can be a strategic move for startups aiming to grow efficiently, but it’s crucial to weigh several factors before diving in. Here’s what you should keep in mind:

• Cost efficiency: Start by evaluating whether outsourcing will truly reduce costs compared to developing capabilities in-house. Consider expenses such as onboarding, training, and potential for scaling.
• Expertise and innovation: Look for outsourcing partners who offer specialized skills and innovative solutions that align with your business goals. The ability to enhance your current offerings or operations through external expertise can provide a significant market advantage.
• Clear scope and expectations: Clearly define the scope of work and set transparent expectations from the outset. This involves drafting detailed contracts and service level agreements (SLAs) to ensure alignment and avoid misunderstandings.
• Cultural fit and communication: Choose partners with a compatible company culture and strong communication practices. Effective collaboration relies on understanding and aligning with your startup’s values and work styles.
• Data security and compliance: Assess how potential partners handle data protection and compliance with relevant legal standards, especially if your startup handles sensitive or regulatory-intensive information.
• Scalability and flexibility: Ensure the outsourcing relationship offers flexibility to scale operations as your startup grows. This adaptability can be crucial during periods of rapid expansion or changing business landscapes.

By focusing on these factors, startups can make well-informed outsourcing decisions that propel growth while circumventing common pitfalls.

Building a Partnership for the Future

One of the main reasons why most startups fail to make outsourcing work for them is the notion that it requires less work. Strategic outsourcing is a partnership, and a partnership requires work to maintain and keep profitable. It’s a boon for startups and businesses looking to scale, but implemented haphazardly, it could have the opposite effect.

Talk with us today and see how the right startup outsourcing partner can help put your business on the right track to scaling smart!

Before taking the leap into the world of startup outsourcing, you should consider what’s necessary to make it a successful venture. Hiring an outsourcing company for specific business tasks is not an outlandish idea nowadays, with its shift from being a value-protecting approach to one that creates business value. In 2019, business process outsourcing generated a global revenue of $26 billion, with companies underscoring cost reduction as one of the main decision-making factors.

Cost cutting shouldn’t be the main reason for tipping the scale, however, because strategic outsourcing is so much more than giving your hard-earned money to the first outsourcing company you talk to that’s willing to take on the tasks or processes you assign them. Aside from the actual outsourcing costs, there are several factors to consider before signing a contract with an outsourcing company. Doing your due diligence is mandatory because this partnership will cost you, and seemingly small mistakes can significantly disrupt business operations in such a way that you spend more than you save.

How Traditional Outsourcing Companies Work

Working with an outsourcing company means inviting someone into your business; they will be involved in the organization’s processes and they will affect some of your business decisions. Also, there are outsourcing costs that you might not have considered at the onset. These costs won’t only cut through your budget but also your other resources, including your time and manpower.

The Contract

An outsourcing contract doesn’t just indicate the work expectations. It should involve every aspect of the outsourcing partnership, including timelines, quality parameters, sanctions and rewards, pricing models, and the like. There are also legal considerations involving intellectual property, non-compete agreements, non-disclosure agreements, and the like.

Traditional BPO outsourcing companies typically also have a specific “lock-in period” wherein getting out of the contract outside of that period would constitute a breach. The length of this lock-in period will vary, but 24 months is standard for many outsourcing companies. It may not be a bad thing in itself, but it’s something to consider before choosing a startup outsourcing partner.

The Deposit

This might come as a surprise to some startup companies because most organizations look at startup outsourcing as a cost-cutting measure. However, you should include the advanced deposit as part of the initial cost of hiring an outsourcing company. This deposit covers any expenses that may be incurred when an outsourcing company starts working for you. The typical advanced deposit covers the first six months, complementing the lock-in period by encouraging clients to get their money’s worth before even thinking of switching providers.

The Headcount

Although some outsourcing companies are prepared to work for an organization regardless of business size, there are some that look for a specific headcount requirement before they start work. While this is understandable when you think about ROI, it limits the options for smaller businesses and startups.

Headcount concerns are easily resolved by setting and discussing specific parameters early on, but it can be a source of frustration if one of the parties isn’t forthcoming.

The Service Fees

Contrary to what some believe, startup outsourcing costs aren’t a one-off expense, and often, they aren’t fixed amounts. This is something you have to prepare for if you’re a startup that’s looking to build quickly without burning a hole in your pocket. Traditional BPO outsourcing companies charge service fees both to client and talent payroll, which can be a big cost, especially if it isn’t part of your original budget.

During the creation of the contract or discussion of service level agreements (SLA’s), feel free to ask about upfront expenses and other costs that may not have been mentioned during the initial meetings.

The Pull-out Cost

This is one of the reasons BPO outsourcing leaves a bitter taste in the mouths of startups. It’s one thing to make clients pay when they want to conclude a partnership early, but it’s another thing to not be explicit about the fact that they need to pay. This is typically a part of the contract when working with an outsourcing company. If it isn’t, you should clarify the cost and what else needs to be done in case circumstances change and there’s a need to pull out from the agreement.

How BPO Outsourcing Companies Can Support Your Business

BPO outsourcing companies offer a wealth of expertise that can significantly bolster various aspects of your business. Here’s how they can help:

Specialized Knowledge

• HR management: Outsourcing your HR processes can streamline operations, from recruitment and payroll to employee relations and compliance with labor laws. BPO outsourcing companies offer specialized teams experienced in these areas, ensuring efficient and effective management.
• Accounting and finance: BPO outsourcing companies provide comprehensive financial services, including bookkeeping, financial reporting, and tax preparation. Your business benefits from experts who stay up-to-date with financial regulations and can tailor strategies to your specific needs.

Market Expansion

• Local market insights: For businesses looking to expand internationally, BPO outsourcing companies offer invaluable local market expertise. They provide insights into consumer behavior, competitive landscapes, and cultural nuances, helping your business navigate new territories with confidence.
• Language fluency: Overcome language barriers with BPO teams that offer multilingual capabilities. This ensures that communication with clients and partners across different countries is smooth and effective.

Legal Support

• Country-specific legal assistance: Navigate the complexities of international law with the assistance of legal experts well versed in the regulatory environments of various countries. BPO outsourcing companies help ensure compliance and mitigate risks, allowing you to focus on your core business activities.

By leveraging the specialized expertise of BPO companies, your business can enhance operational efficiency and enter new markets seamlessly, freeing you up to concentrate on strategic growth initiatives.

Choosing the Ideal Outsourcing Company

Choosing the right outsourcing company for your business is part of strategic outsourcing because it determines how you will work together moving forward. Before signing any agreement, you should check the contract carefully to ensure that you get what you pay for and the outsourcing company provides what’s expected of them.

Although outsourcing costs and contracts vary, they fall under three main categories.

• Time and material outsourcing. This is a common outsourcing contract that’s typically used for long-term engagements when an exact amount can’t be specified for the service provided. The overall cost is dependent on the products or facilities required and the time taken to complete them. Although the cost isn’t fixed, this outsourcing contract allows for more flexibility throughout the project or engagement, allowing for modifications deemed necessary as the engagement progresses. This contract concludes only when the client’s requirements are fulfilled.
• Fixed Price outsourcing. In this outsourcing contract, the client’s requirements and estimated costs are explicitly indicated before the engagement. The client sends a request for proposal (RFP) to the preferred outsourcing company and that company then places a bid for the job. Commonly used for IT outsourcing, it’s preferred due to the fixed cost but is less flexible and minimizes client involvement in the scope of the engagement.
• Dedicated team outsourcing. As the name suggests, this outsourcing contract provides you a dedicated team with specific tasks and goals that are specified at the beginning of the engagement. This team will act as an extension of your in-house team and can be tasked to work on any project you wish to outsource. As a long-term engagement, you can hire specialists or highly skilled workers that you can trust to work on new projects down the line.

Comparing Internal Costs with Outsourced Solutions

When considering outsourcing to replace an internal team, analyzing the cost-effectiveness is crucial. Here’s a guide on how to compare your current internal expenses with potential outsourced costs.

Determine Total Internal Costs

Start by assessing all expenses linked to your current internal team. For example, if you’re evaluating the cost-effectiveness of outsourcing an IT manager:

• Salary and benefits: Calculate the annual salary along with healthcare, retirement, and other benefits.

• Operational costs: Consider costs like office space, equipment, and software licenses.

• Training and development: Add expenses related to professional development and certification courses.

• Leave coverage: Include costs incurred when covering leaves of absence and temporary replacements.

Calculate Outsourced Costs

Once you’ve outlined your internal costs, gather comparable figures from prospective outsourcing partners:

• Base fees: Determine the flat rate charged by the BPO outsourcing company for their services.

• Additional charges: Look for any extra fees, such as charges for overtime, special projects, or urgent support needs.

For high-volume roles like customer service, a detailed analysis can help:

• Cost-per-seat: Calculate your current expenditure per employee monthly and compare it to the potential cost per seat charged by the outsourcing provider.

• Per-minute fees: Some BPO outsourcing companies might include additional fees for time spent on calls, so factor in this variable when comparing costs.

Conduct a Thorough Analysis

Compile the data to compare the total costs on a like-for-like basis. This means balancing all direct and indirect costs of hiring and maintaining an internal team against the comprehensive pricing of outsourcing. Approaching the cost comparison with a detailed and structured methodology will help you make informed decisions on whether outsourcing  solutions meet your financial and strategic objectives.

How to Get Accurate Quotes from BPO Outsourcing Companies

To secure precise quotes from BPO outsourcing companies, start by clearly defining your business needs. Are you looking to outsource a specific department, such as customer service or payroll processing? Or do you require support across multiple areas, like finance and human resources? Pinning down these details ensures you can communicate your requirements effectively.

Steps to Follow:

Step 1: Identify your needs. Outline the tasks or processes you want to outsource. Whether it’s handling customer inquiries, managing payroll, or streamlining your supply chain, having a clear understanding will guide your communication with potential partners.

Step 2: List potential service providers. Do your research to compile a list of reputable BPO companies. Look for reviews, case studies, and client testimonials to gauge their expertise in your required area.

Step 3: Prepare detailed inquiries. Craft specific questions about their services, pricing models, and capabilities. This will help in gathering comparable information and ensure transparency from the start.

Step 4: Request for proposal (RFP). Send an RFP to your shortlisted BPO companies. Make sure it includes all necessary details about your needs, expected deliverables, and any other critical criteria.

Step 5: Communicate your expectations. During initial discussions, be upfront about your business goals and the level of service you expect. A good BPO company will offer tailored services based on this dialogue.

Step 6: Review and compare quotes. Once you receive quotes, carefully analyze what each includes. Look beyond price alone – consider value, service levels, scalability, and their approach to customer service.

Direct Consultation Option

If you’re unsure about the exact services you need, don’t hesitate to contact BPO outsourcing companies for a preliminary consultation. Many firms offer advisory support and can help identify the services that best suit your business’s needs. They’ll discuss your objectives, advise on suitable solutions, and provide a detailed quote tailored to your specific requirements.

By following these steps, you ensure that the quotes you receive are as accurate and relevant as possible, setting a strong foundation for a successful outsourcing partnership.

Strategic Outsourcing Before Outsourcing

The best option when it comes to outsourcing contracts is to have it reviewed by a legal expert. This ensures that discrepancies are identified early on to avoid a legal mess later. Your legal counsel will know the essential points and what to look for in the contract so that you get a fair deal. You can also ask any legal, contract-, or business-related questions so you’re in a position to make the best decisions for your startup and strategic outsourcing venture.

If you want to outsource strategically, it begins with finding a new partner and agreeing on a contract that serves the interest of both parties. Review proposals and outsourcing costs carefully and read between the lines to understand both explicit and implicit stipulations. Ask questions and clarify points when necessary, regardless of how minute the point may be.

Talk with us today to see what options you have to expand your team and scale your business. We’ll help you with the heavy lifting so you can focus on strategy and the next steps you can take to grow your startup.

Startup outsourcing can be a boon for businesses that have a plan in place regarding which tasks or processes they need to outsource and which to keep in-house. However, it’s vital to keep in mind that it’s not a “set and forget” type of solution wherein you delegate tasks at the beginning of a project and expect your chosen outsourcing company to resolve any issues without your involvement.

You also have to find the right fit when it comes to choosing an outsourcing company because there are times when an outsourcing model doesn’t fit your company culture. You have to know first and foremost what problem you’re trying to solve. Strategic outsourcing aims to solve problems that affect the organization as a whole; it’s not simply an IT or customer service solution. This means that you need to know your business inside out before jumping into any outsourcing venture.

Understanding the Outsourcing Process

To embark on a successful outsourcing journey, it’s essential to understand the typical stages involved. Here’s a comprehensive look at the process:

• Initial engagement: Begin by filling out a contact form or reaching out directly, setting the stage for a structured partnership.
• Communication setup: An assigned manager or point of contact will handle all communications, ensuring seamless interaction and clarity throughout the project.
• Strategic planning and analysis: The outsourcing company will analyze the market and competitors, create tailored scenarios, and evaluate the scope of work based on your business needs and requirements. This step ensures alignment with your strategic goals.
• Design and development: The internal logic is formed, starting with mind maps, moving to wireframes, and culminating in live prototypes. This approach ensures a robust UI/UX design that meets your expectations. The coding and testing phases follow, often divided into sprints to track progress, fix bugs, and implement necessary changes.
• Deployment and support: For mobile apps, publishing in the App Store and Google Play is the next step. With web and desktop applications, direct deployment is often sufficient. Ongoing support is crucial to ensure the product’s success post-launch.

The Ongoing Outsourcing Conversation

While startup outsourcing is a partnership between your company and the outsourcing company, you should also ensure that there’s an “executive partnership,” that is, you should have the full support of the executive team. Otherwise, it will be a challenge to manage executive expectations and it could be a hindrance to the success of the project. Even if you’re delegating or outsourcing tasks or processes to a third-party, there needs to be a level of engagement between your company’s leadership team and the outsourcing company.

This is why it’s important to get buy-in from leadership and the other members of your organization to ensure a seamless transition. You need to have a strong business case for strategic outsourcing at the onset, with regular status updates as the project progresses. Timelines and expectations should be managed before and during the outsourcing venture.

Successful startup outsourcing is an ongoing conversation.

Startup outsourcing isn’t plug-and-play because it requires regular back-and-forth between you and your outsourcing company. It’s a relationship that should be nurtured and a process that should be monitored regularly if it’s to be successful.

Real-life Outsourcing Challenges

Even outsourcing companies face challenges when it comes to dealing with startup companies. The common pitfalls are miscommunication and a lack of understanding of the client’s needs. Most outsourcing challenges can be avoided through proper planning and identification of potential issues, but things don’t always go according to plan—even in our case.

The key for startup outsourcing companies is being prepared to address issues and keeping an open line of communication with the startup companies they’re working with. Below are a few challenges nXscale faced and the lessons we learned along the way.

The Communication Barrier

Direct communication is vital if an outsourcing company is to understand the client’s specific requirements. However, there are times that a client will hire another third-party to manage the outsourcing process. This can result in miscommunication and delays because communication lines are managed by a “middleman.”

In our case, this led to communication delays, missed messages, and misunderstandings because messages were not directly delivered by the client and unintentionally reinterpreted by the middleman. This arrangement also presented issues when it came to accountability because indirect communication resulted in a lack of context.

Lesson Learned: Always ensure that project details and updates are accurate and provided regularly. Clarify vague points if necessary and document discussions for future reference.

Lack of an Onboarding Plan

Although startup outsourcing may seem simple, the entire process can become overly complicated if you have no idea what you’re doing. Startups often know which tasks or processes they want outsourced but aren’t sure how to go about it specifically. This is where an outsourcing company can help.

It can still be a problem, however, when a client jumps blindly into an outsourcing project. Building a team doesn’t stop at screening and hiring the right people; companies should have an onboarding plan in place to help new hires learn the ropes quickly and get settled within the workplace—even if they’re working from home.

When we helped one of our clients expand their team, it became apparent that there was no onboarding plan prepared for the new hires. This resulted in confusion regarding employee tasks and other administrative concerns, which significantly affected employee morale and made team management more challenging than it had to be.

Lesson Learned: As an outsourcing company, the people you hire are also your clients. Ensure that you provide the same level of service to them as you would to your startup or business clients.

Not Enough Collaboration

For collaboration to be effective, there needs to be transparency between the client and outsourcing company. The purpose of regular status updates is not just to monitor the progress of a project but also to identify potential setbacks that can lead to delays or significant project modifications. Coordination between in-house and outsourced teams and between client and outsourcing company is crucial to maintain a high level of service that’s not bogged down by miscommunication and lack of visibility.

Lesson Learned: Always be upfront with clients to avoid making small issues worse and to avoid any further problems. Issues are more easily addressed when identified early, so discuss them as they arise and before they become more serious.

Not Sticking to the Startup Outsourcing Plan

There are times that changes need to be made due to unforeseen circumstances, but last-minute changes in project scope can often seem like going back to square one. Consequently, this affects the progress of the project and can lead to wasted time and effort. Always make the scope of an outsourcing project clear at the onset and stick to the outsourcing plan, unless there’s justifiable reason to divert from it.

Lesson Learned: Always prepare for reasonable changes in the project, but a change in scope means a restarting of a project or the creation of a new one.

Regional Price Differences in Equipment

Startup outsourcing entails working with providers in different geographical locations, which often lead to certain logistics differences like price of equipment and shipping policies.

When a client wanted to purchase laptop computers locally and ship them to our location, we faced some logistics problems. These problems weren’t limited to shipping delays, either, there were also the issues high shipping fees and customs and other taxes. When entering into an outsourcing agreement with clients, outsourcing companies should ensure that the clients are aware of the fees and taxes they need to include in their budget plans.

Lesson Learned: When discussing the budget with clients, outsourcing companies should always include regional taxes and other mandated fees to avoid surprises and align expectations.

We’re On the Same Team

Ultimately, what we’ve learned through our outsourcing journey is that we aren’t a separate team. When we work with you, we become an extension of your team—with the same goals and with the same dedication to achieving those goals. We are your offshore team, working with you to save costs while improving the efficiency of your overall operations.

Talk with us today and let’s discuss what your nXscale team can do for you.

If you’ve ever built a startup—or any business, for that matter—you know that resources are always limited, there’s never enough time, and you have to do the job of multiple people by yourself. Every entrepreneur and startup founder knows that the road won’t be easy, but the obstacles can still surprise you and throw you off-course. Obstacles can spoil your plans because they weren’t anticipated, you don’t have the resources to address them, or you’re unsure of your next steps.

Money will always be a concern, especially at the onset. It’s a delicate balance: pinch your pennies and your business might not grow at the rate you expected, but spend too much and it might not grow at all. Ironically, trying to cut costs aggressively when you’ve barely launched your startup can do more harm than good. Instead, focus on the aspects of the business that will help sustain it and push it forward, like marketing, which is an oft-neglected part of the startup planning stages.

Manpower is also something that should be considered during the early days of your startup. The nature of startups require specific skills and talent, and getting the right people can mean the difference between an up-and-coming player and a startup that would have made it. Staffing requirements should be considered while you’re just starting because, as your startup grows, any talent gaps and staffing issues are also magnified.

“I Can Do It” vs. “I Can Do It All”

A startup is a very dynamic organization by nature, and this can affect the roles that people play in the organization. Specifically, roles will overlap and you may find that you and your staff may be doing more than what’s in the job description.

As a founder, you may be tempted to do everything yourself, but this isn’t a sustainable solution. If you do the job of several people by yourself, you won’t be able to give 100% to any single task and you’ll be decreasing your productivity by as much as 40%.

Hiring the right people will prove to be a smart investment despite the process taking up a lot of time and effort, especially for small teams. Realizing that you made rushed decisions during the recruitment process can prove to be major hurdles down the line, as staffing issues are magnified as your team grows.

Startup outsourcing is a solution that helps new businesses bridge talent gaps while also keeping costs at a minimum. If you’re wondering if outsourcing can help optimize business processes or fill talent gaps within your startup, it may be time to start looking for a startup outsourcing company. Below are a few signs that may indicate your need for one.

You Have Very Specific Skill Requirements

Versatility is key in hiring for your startup, but this doesn’t mean that you’re hiring a single person to do everything for you. Some businesses or processes require expertise  or extensive experience in a certain field. Unless your startup specializes in a certain field, it’s best left to the professionals.

Startup outsourcing will help you with your staffing requirements by expanding the talent pool from which to get the people you need. Whether you’re looking for a finance expert, a web programmer, or a digital marketing professional, Outsourcing ensures that you get the right talent that fits your specific needs. Broadening your search also helps cut down costs and provides more options.

You Need a Cost-efficient Solution

For many startups, outsourcing is a solution that helps significantly reduce overhead costs. Aside from staffing, you get access to an outsourcing company’s resources and services. This is comparatively less expensive than hiring a full-time employee in-house. It’s also easier to hire people for freelance or project-based tasks if you have seasonal staff requirements. Outsourcing companies also offer back-office services like payroll, accounting, and office management, to name a few.

You Need More Time

If 24 hours in a day doesn’t feel enough to meet your deadlines and you feel like a candle burning at both ends, it’s time you asked for help. Startup outsourcing companies can provide the help you need by helping you hire people—plus onboard, train, and manage them if need be. As a founder, you should set the direction of your startup, but it doesn’t mean you have to steer by yourself.

You’re Looking for New Ideas

Startup teams start with good ideas, but you can’t expect them to have new, innovative ideas all the time. Often, even weekly brainstorming sessions don’t help, and only a fresh set of eyes can help you and your team get a new perspective. Viewing the business from the outside looking in can provide valuable insights that you may not have considered. Ideas from someone who is able to distance himself or herself from the business can help you identify areas for improvement and processes or strategies that you can double down on.

Key Functions to Outsource

While any part of a business can be outsourced, certain functions are particularly beneficial for startups to delegate:

• IT support and software development: Leveraging the expertise of tech professionals can ensure your digital tools run smoothly. These experts bring fresh ideas and ensure you’re using the latest technology, providing both innovative solutions and cost savings by avoiding the need to assemble an in-house team.
• Customer service and administrative tasks: By outsourcing these areas, startups can ensure that customer queries and paperwork are handled professionally and efficiently. This allows startups to provide round-the-clock support, enhancing customer satisfaction and loyalty across different time zones.

How to Achieve Startup Outsourcing Success

Startups looking to outsource effectively need a robust strategy. Here’s how to ensure your outsourcing venture thrives:

• Define your objectives clearly. Think of your outsourcing goal as setting your GPS. This clarity will not only guide but also empower your decision-making process, ensuring alignment with broader business goals.
• Maintain open communication. Regular and transparent dialogue is essential. It minimizes misunderstandings and helps keep projects on the intended trajectory, much like a steady navigation system.
• Establish clear expectations. Articulate your needs and timelines early on. Defined expectations act as a roadmap, helping to avoid potential pitfalls and conflicts down the line.
• Embrace diversity. Welcoming diverse perspectives can be a catalyst for innovation, offering fresh ideas and enhancing creativity within your projects.
• Prioritize quality over cost. While budget constraints are real, compromising on quality can be detrimental. Quality work should always mirror your startup’s core values and standards.
• Foster a collaborative environment. Treat your outsourcing partner as an extension of your team. Strong relationships can yield exceptional results, turning collaborative efforts into mutually beneficial outcomes.
• Select the right partner. Opt for partners who align with your startup’s ethos and ambitions. A shared vision can be pivotal in nurturing a strong and sustainable partnership.

By implementing these strategies, startups can navigate the intricate outsourcing landscape seamlessly, transforming collaborative efforts into fruitful successes.

The Future of Startups is Outsourcing

Startup founders should look beyond the negative connotations about outsourcing and focus on strategies that will make their business thrive. There are advantages and disadvantages to startup outsourcing, but with proper planning and delegation, it will more than pay for itself in the long run. Diversifying your organization ensures that you have the necessary competencies and a healthy mix of perspectives that can help take your business to the next level.

Schedule a call with us today to see how startup outsourcing can optimize your business for easy scaling and healthy growth. Focus on the more important things like strategy and business direction and leave the dirty work to us.

As a startup founder, there’s nothing wrong with looking ahead and making projections about your business and what it may need down the line. There will always be a roadmapping and planning stage that can take a couple of days to a few weeks, depending on project or business size. This is also the time when you figure out the right kind of talent you need to run your startup and start building relationships with potential candidates.

Now, more than ever, every company should be more careful and intentional about how they hire. The landscape is very different, and can be quite challenging if you don’t rethink your approach. Hiring more people doesn’t necessarily result in a more robust organization, especially if you don’t hire people with skills complementary to your business.

4 Tips for Startup Hiring

Projections made in the early stages of a startup are rarely accurate, and the same goes for startup hiring. Rather than hiring based on expectations, you should hire in response to demand. This isn’t to say that you shouldn’t be building a pool of candidates, but you should be careful when it comes to actually appointing someone for a specific role.

Below are a few ways you can improve your startup hiring process to ensure that you assign the right person to the right job.

Leverage Digital Tools

The talent market has changed drastically due to the pandemic. With most people in a remote or hybrid working arrangement, startup hiring has taken the same direction. Interviews are now done online, and although video conferencing tools help in putting a face to a resumé, it’s still a limiting interaction compared to an in-person interview.

Embracing digital means going where the candidates are: reaching them through their preferred media, talking in their language, and making an impression online. Using social media is a two-prong approach: you can use public social media profiles to get an idea about the candidates you’re looking to hire and you can use it to create a public company profile to help you put your best foot forward.

There are also software available today that can help you with screening and selecting candidates. Ultimately, the decision should be made with the help of these digital tools, but you should be careful of unconscious bias and use your better judgment when it comes to hiring candidates for your startup.

Build a Strong Brand and Online Presence

Building a brand is now mostly done online, and it’s vital because a strong brand lessens the need for active recruiting. Research shows that over 75% of professionals are passive candidates, widening your candidate pool and opening up opportunities to talk to those who are already hired but looking for greener pastures.

A strong brand and online presence puts you in front of these candidates and increases the chances of them and other actively applying candidates to interact with you and consider applying for your open roles.

Continuously improving brand reputation also has its long-term benefits, as it reduces employee turnover by as much as 28%.

Craft Conversational Job Descriptions

Job descriptions shouldn’t just be a rundown of responsibilities and requirements, it should be a description of the overall employee experience while working for your startup. It should communicate directly with your target audience and show them how working in your company can contribute to their career and personal growth.

Presenting a list of responsibilities without proper context will alienate candidates and discourage them from pursuing their application. You already know what you want your hires to do; show them through your job descriptions what your company can do for them if they become employees.

Be Your Own Salesperson

If you don’t believe in your own product, no one else will. In this case, your product is your startup; as a founder, you should be your own biggest fan. Potential candidates do their own research before applying for a job. They will only pursue an application if they like what they see about your startup.

Being the most active salesperson in your organization sets the tone for the rest of the employees and ingrains in them the organization’s and your brand’s best and most notable features.

Aside from the information from your website, candidates will look at social media, review sites, and information from current and past employees. If you have some negative reviews online, see if these issues can be addressed and take a look at how to further improve your company culture. Happy employees result in positive reviews and will help you land the right talent for the open positions in your organization.

The Start of a Startup

In the early stages, startup founders will find themselves performing a number of important tasks that will vary from strategizing to negotiating with potential partners or hires. In between all these, they should also be constantly “selling” the startup to customers. Active selling can help develop resilience in the face of challenges and objections, and will help you identify what works and what need to be improved.

Ultimately, Your growing startup will need the dedication of a capable team. It can be a challenge to hire people based on early projections, but hiring in response to demand will ensure that you bridge talent gaps and hire the best people for the job.

Talk to us today and find out how you can get the best talent in the Philippines and why you should consider offshoring your workforce during the startup hiring process.