In the first part of this blog series, we discussed the differences between hiring freelancers and a software house for your company’s digital product development. We highlighted the advantages that a software house brings to the table, such as integrated processes, broader scope, diverse skill sets, and easily measurable results.
In this second part, we will delve deeper into outsourcing IT staff and software developers, and how doing so can benefit your company, especially when working on ongoing projects.
Outsourcing IT Staff and Software Developers: A Game Changer for Ongoing Projects.
Outsourcing refers to hiring external workers or firms to handle specific business tasks instead of hiring or training employees in-house. This approach can offer several advantages for companies working on ongoing projects, including:
Outsourcing can save your company money by eliminating the need to pay for employee benefits, office space, equipment, and other expenses associated with hiring in-house staff.
Cost Savings: A Deeper Look
Outsourcing can result in significant cost savings for your company, as it eliminates various expenses associated with hiring in-house staff. Here’s a breakdown of the cost-saving aspects:
Employee Benefits: When you hire in-house employees, you are typically responsible for providing benefits such as health insurance, retirement plans, paid time off, and more. Outsourcing eliminates the need to cover these expenses, as the outsourcing company is responsible for providing benefits to their employees.
Example: If your company hires an in-house developer with an annual salary of $80,000, you might also need to allocate an additional 20-30% for employee benefits, which could amount to $16,000-$24,000. By outsourcing, you avoid these extra costs.
Office Space and Utilities: In-house employees require office space, which can be costly, especially in prime locations. Outsourcing allows you to save on rent, utilities, and other related expenses, as the external workers operate from their own workspaces.
Example: Renting office space for an additional five employees could cost your company $2,000 per month or more, depending on the location. By outsourcing, you can bypass this expense entirely.
Equipment and Infrastructure: In-house employees may require computers, software licenses, office furniture, and other equipment to perform their tasks. Outsourcing eliminates the need to invest in these items, as external workers typically use their own equipment and software.
Example: If you need to provide each new in-house employee with a computer, software licenses, and a comfortable workspace, you might spend $3,000 or more per employee. Outsourcing helps you avoid these upfront costs.
Recruitment and Training: Hiring in-house staff can involve a lengthy recruitment process, including advertising job openings, screening applicants, and conducting interviews. Once an employee is hired, you may also need to invest in training and onboarding. Outsourcing bypasses these costs, as the external firm is responsible for recruitment and training.
Example: If it takes 30 hours to hire a new in-house employee, and your HR manager’s time is valued at $50 per hour, that’s $1,500 spent on the hiring process alone. By outsourcing, this cost is transferred to the outsourcing company.
The conclusion: Outsourcing can lead to substantial cost savings by eliminating expenses related to employee benefits, office space, equipment, and recruitment and training. These savings can then be allocated to other areas of your business, such as marketing, research and development, or enhancing your product offerings.
Flexibility: Outsourcing offers flexibility in scaling your team up or down as needed, without the long-term commitment that comes with hiring full-time employees.
Flexibility: A Deeper Look
Outsourcing offers a higher level of flexibility compared to hiring full-time employees, making it easier for your company to adapt to changing demands, project requirements, or market conditions. Here’s a breakdown of the flexibility-related benefits of outsourcing:
Scaling Up: During periods of increased workload or when new projects arise, outsourcing allows you to quickly and easily bring in additional staff to handle the increased demand. This is particularly beneficial when you require specialized skills or expertise for a limited time.
Example: Imagine your company lands a large project with a tight deadline, requiring five additional developers with specific skill sets. Instead of spending time and resources on recruiting, hiring, and training full-time employees, you can outsource these roles to quickly meet the project’s needs.
Scaling Down: In contrast, when workloads decrease or projects come to an end, outsourcing enables you to reduce the size of your team without the challenges associated with laying off full-time employees, such as severance packages and potential damage to your company’s reputation.
Example: After the completion of the large project mentioned earlier, you may no longer need the additional developers. With outsourcing, you can easily scale down your team without incurring costs or facing the emotional and legal challenges of laying off full-time employees.
Adjusting to Fluctuating Workloads: Many businesses experience fluctuating workloads due to seasonal changes, economic shifts, or varying project demands. Outsourcing allows you to dynamically adjust your team size in response to these fluctuations, ensuring you always have the right number of staff to meet your current needs.
Example: If your company’s workload tends to increase during certain months of the year, you can outsource additional staff during those busy periods and scale back during slower months. This approach helps you maintain productivity while avoiding the overhead costs of retaining a larger in-house team year-round.
Accessing a Wider Range of Skills: Outsourcing provides access to a diverse pool of talent, allowing you to bring in specialists for specific tasks or projects as needed, without the long-term commitment of hiring full-time employees.
Example: If your company requires a UX designer for a three-month project, outsourcing allows you to hire an experienced professional for the duration of the project, without needing to create a permanent position.
In summary, outsourcing offers your company the flexibility to scale your team up or down as needed, accommodating fluctuating workloads, and accessing specialized skills without the long-term commitment associated with hiring full-time employees. This adaptability can help you better manage costs, improve efficiency, and maintain a competitive edge in a constantly changing business environment.
Faster Project Completion: A Deeper Look
Working with specialized outsourcing firms can accelerate project completion and reduce errors, as they often possess expertise and experience that your in-house employees may not have. Here’s a breakdown of how outsourcing can lead to faster project completion:
Expertise and Experience: Outsourcing firms typically focus on specific areas of expertise, allowing them to stay current with the latest trends, tools, and best practices. This specialized knowledge can contribute to more efficient project completion and higher-quality results.
Example: If your company needs to develop a mobile app, outsourcing to a firm with extensive experience in app development can help you leverage their knowledge of the most effective design principles, technologies, and strategies, resulting in a better product and faster time-to-market.
Streamlined Processes: Outsourcing firms often have established processes and methodologies in place, which can lead to more efficient project execution. By leveraging their experience with similar projects, they can anticipate potential roadblocks and proactively address them, reducing delays and errors.
Example: An outsourcing firm experienced in software development may have a robust project management system, allowing them to efficiently allocate resources, track progress, and communicate with your team. This can help ensure that your project stays on schedule and within budget.
Access to Additional Resources: When you outsource a project, you gain access to the outsourcing firm’s resources, such as their team of professionals, tools, and technology. This can help you complete the project more quickly by reducing the time spent on recruiting, training, and equipping in-house employees.
Example: If your project requires advanced data analytics, outsourcing to a firm with a team of skilled data scientists and access to cutting-edge analytics tools can help you complete the project faster than if you were to recruit and train in-house staff to fulfill these needs.
Focus on Core Competencies: Outsourcing non-core tasks or specialized projects allows your in-house team to concentrate on their core competencies, leading to increased productivity and efficiency within your organization.
Example: By outsourcing a complex software development project, your in-house team can focus on strategic planning, marketing, and customer support, ensuring that these critical aspects of your business continue to run smoothly while the outsourced firm handles the technical aspects of the project.
To sum up, working with specialized outsourcing firms can lead to faster project completion and reduced errors due to their expertise, experience, streamlined processes, access to additional resources, and the ability to focus on core competencies. This can ultimately help your company deliver high-quality products or services, meet deadlines, and maintain a competitive edge in the marketplace.
Staying Up-to-Date with Technology:
Outsourcing companies usually have experts in their field who are up-to-date with the latest tools and techniques, ensuring that your projects leverage cutting-edge technology.
These companies typically employ experts in their field who stay up-to-date with the latest tools and techniques, helping your business stay competitive and innovative in the rapidly evolving technological landscape.
Example:Imagine your company is looking to implement a new Customer Relationship Management (CRM) system to streamline your sales and customer support processes. Outsourcing this task to a specialized IT firm with expertise in CRM solutions can provide you with access to the latest CRM software, features, and integration capabilities.
The IT firm’s experts will have a deep understanding of current industry trends, best practices, and technological advancements, enabling them to recommend and implement the most suitable CRM system for your business. This can result in a more efficient and effective CRM solution that caters to your specific needs while incorporating the latest innovations in the field.
Outsourcing with Leaware: A Trusted Partner for Your IT Needs
In conclusion, outsourcing IT staff and software developers can provide significant benefits to companies with ongoing projects. By partnering with a reliable software house like Leaware, you can access a broader talent pool, save money, enjoy greater flexibility, complete projects faster, and stay up-to-date with the latest technologies. Consider outsourcing as a viable option for your business and experience the advantages it can offer.
For more info you can watch our video: How can team extension help your company?