Big data technology has been instrumental in changing the direction of countless industries. Companies have found that data analytics and machine learning can help them in numerous ways.
Big data has helped companies identify promising cost-saving measures, recruit the best talent, optimize their marketing strategies and realize many other benefits. However, there are a lot of other benefits of big data that have not gotten as much attention. Over overlooked advantage of big data is that it can help improve outsourcing strategies.
We talked about the benefits of outsourcing IoT and other data science obligations. However, the converse approach can also be useful. You should use big data to improve your outsourcing models by data mining pools of talented employees.
Outsourcing is becoming a lot more important than ever. Global companies spent over $92.5 billion outsourcing tasks in 2019. Smart companies realize that the right outsourcing strategy needs to be carefully executed, which requires using technology the right way.
Data-Driven Businesses Are Shifting More Towards Outsourcing Models
The thought of outsourcing some of your business’s responsibilities and functions may have crossed your mind for several reasons. Volume is picking up, an instrumental employee is about to leave, or you’d like to expand but lack expertise. Partnering with independent contractors and outsourcing companies is an effective solution to these scenarios.
Placing everything on the shoulders of an in-house team is sometimes an unrealistic expectation. Outsourcing can give your business access to new knowledge and skills and make your staff’s workloads more manageable. Plus, you might gain access to additional markets and be able to serve your customers better. Small to large companies often benefit from outsourcing in these ways and more.
You will get even more benefits from outsourcing if you incorporate big data technology into it. Here’s why.
Access to Extensive Talent Pipelines with Data Mining
Finding qualified candidates is a challenge for many businesses, especially if the local job market is highly competitive. Nationwide labor shortages can also compound the problem, making it difficult for smaller companies to match larger firms’ higher salaries. Yet every organization needs exceptional talent to fill the shoes of essential roles.
The good news is that big data technology has helped companies deal with the process of identifying talented employees. Employee networking sites like LinkedIn have massive databases of talented employees that can make it easy for companies to find the professionals they need. These databases are usually used to find full-time employees, but can useful for outsourcing projects to qualified experts as well.
Having those positions remain empty for months on end puts strain on existing staff. That extra work could turn into additional resignations, leaving a business in jeopardy. By using data mining to assist with outsourcing and hiring in different countries, your company can access a broader range of talent. You won’t limit your pipeline to local labor and will gain the staff you need to keep everything running smoothly.
While hiring outside your business’s home country does carry some added risk, you can minimize this through research of international hiring guides and investing in partnerships. For example, companies that hire international employees sometimes work with a vendor that’s established legal entities in other countries. The hiring business doesn’t have to incur the expenses of doing this. The vendor takes care of the paperwork according to international labor laws, letting you focus on finding skilled workers.
Over a third of small companies outsource at least one business process. Accounting, IT, and digital marketing are the top processes that small businesses outsource. While these are all necessary functions, they may not be the reason your company exists. Perhaps your core function isn’t to troubleshoot computer hardware and software or design ad campaigns. Instead, your area of expertise could be selling books, providing insurance, or creating jewelry.
Outsourcing departments and functions your company needs to run but doesn’t have proficiency in can be more efficient. There won’t be a need to find and hire staff with the know-how. Expensive training won’t be necessary, and you’ll save the time it will take to find qualified staff. In-house employees can direct full attention to sharpening the skills that sparked your business idea and contributed to your growth.
Farming out non-core business functions also gives in-house staff added flexibility. If your company has a few employees wearing multiple hats, they can refocus on core responsibilities. Employees can develop specialties rather than shift between unrelated tasks and attempt to be “jacks of all trades.” Your business will benefit from further skill enhancement and knowledge that aligns with its purpose.
One of the other benefits of data analytics is that it can help forecast future business activity. You can use predictive analytics tools to anticipate future sales volume, regulatory issues and much more.
Sales and work volumes are impacted by seasonal demands, economic activities, and product or service life cycles. Some businesses respond to fluctuating staffing needs by hiring temporary workers. But relying on an internal HR department to constantly scale up and down can eventually hurt a company. Your sources of talent could dry up as you become known as a revolving door of unstable employment opportunities.
Outsourcing some of your business’s hiring needs can remove some of this stigma. A vendor supplies the supplemental manpower you need during temporary increases in volume. You could then end your contract with the outsourcer once the volume decreases. An alternative is to keep an active contract going, allowing a vendor to take on added work when it’s available. The outsourcer can redistribute its employees according to changes in your activity.
For example, business outsourcing companies hire the same staff to move between different accounts. In call centers, for instance, an employee might work on two accounts simultaneously. For part of the week, they handle customer service calls for one account. The remainder of the week, they take tech support calls for another account. Both companies get the extra labor they need without worrying about hiring, payroll, onboarding, and retention costs.
You want to use data analytics to both make better outsourcing decisions and understand the future needs of your business. This technology-centric approach will lead to higher quality decision making and help you ensure resources are used appropriately.
Increasing cost efficiency is a primary reason why large organizations decide to outsource. But smaller businesses can also realize cost savings by using data analytics solutions to work with outsourcing companies. This is because some of your fixed expenses can become variable, allowing you to reinvest into your company’s growth.
For instance, you might need an assistant to handle incoming calls, emails, and scheduling. However, that need may not be high enough to justify the expenses of a full-time employee with benefits. You can outsource tasks an employee would normally handle and only pay for the time a virtual assistant works. Your overall overhead will be lower, and if volume drops, you won’t have to lay someone off. If you use a data mining tool to find the right talent to outsource to, then you will get the most bang for your buck.
Short-term or one-off projects are another way outsourcing helps small businesses remain cost-efficient. You’ll save the expense of bringing another employee on board to handle the overflow and stay on budget. You won’t have to divert employees’ time away from other responsibilities, pay overtime, or allocate extra comp days. And you’ll keep your projects and tasks on schedule instead of putting them at risk by stretching internal resources too thin.
The Benefits of Data-Driven Outsourcing Are Clear
Big data is invaluable for many aspects of a company’s operations, including outsourcing various functions. Outsourcing one or more of your company’s departments provides benefits, such as flexibility and cost savings. Using data-driven approaches to business to collaborate with outsourcers adds to internal skills and expertise while expanding whom you can hire to support your operations. Relying on independent contractors and outsourcing companies will help you better manage fluctuating business cycles. Through outsourcing, you can discover added value and develop a longstanding competitive advantage.