The current economy is heading toward a state of flux and the world is heading into an economic downturn. There might be a looming recession imminently coming our way as early as the first quarter of 2023. There is a 23% probability that the USA will fall into an inevitable recession by Sep 2023 according to a projection by Statista. There is also a 50% chance for countries across Europe to slip into an economic depression next year. Economists have also projected a 20% probability that China might experience a recession according to ET. And even South Korea will also slip into a downfall with a 25% chance.
What does this mean for businesses? There is no straight answer to this particular question though. It all depends on how you plan to tackle the challenges that come with a recession. However, there are some things that can help you reduce operating costs before the depression strikes. If you are looking to align your approach and want to explore outsourcing options to cut operational costs, the following article will give you some insights that you can implement.
In order to survive the impending economic hardship, you can simply outsource your operational requirements to third-party service providers. This will help you greatly strengthen your business alignment and reduce the need for any company-wide lay-offs as the recession happens.
Outsourcing can help you reduce the administrative costs of your business. When the pandemic struck in 2020, a study by Deloitte showed that almost 70% of businesses worldwide turned to outsourcing partners. According to outsource accelerator, it was also found that these helped organizations reduce their labor cost by up to 70%
But how does outsourcing reduce costs? Simple, when employees are hired, they will need to be trained, on-boarded, and even benched for a complete project briefing. These costs can often be higher than paying for an outsourced function or product. As we are heading towards economic doomsday, it is important that you stop your hiring operations well ahead and save up with third-party resources.
A report by Gartner shows that 75% of business leaders believe that the main risk factor for any business operating in the IT sector is the shortage of talent availability.
Outsourcing provides you with access to a more productive workforce. In times of economic uncertainty, companies are often forced to reassess their business models and make tough decisions about how they spend their capital. If you’re outsourcing during a recession, this means that your company has less money than it did before, so it’s time for some tough choices about where those savings should go.
You might choose to increase outsourcing by hiring temporary workers from abroad or from within the country on a contract basis rather than full-time employees who require health insurance coverage and other benefits (which can be costly).
Instead of going about these hassles as the recession happens around you, it is easier to do it right now when the services are much more accessible now.
When you’re in a recession, there are very few places to cut costs. If your company is struggling to stay afloat and needs help, outsourcing is one of the few ways that can help. As your hire someone like CraftedQ, we will assist you with an expert resource network and a team that will handle the full scale of your requirements.
The benefits of reducing operational costs will be evident as businesses around you plummet while you stand tall and consistent with your process operations. Outsourcing can help you with Improved process efficiency by hiring a much more productive workforce (which will not only save overhead costs but also increase business profits). Grow your business by increasing revenues, lowering expenses, and cutting down on costs associated with administration, marketing, and other support services.
Outsourcing allows you to expand your product offerings. A company that is not growing, but rather maintaining its current size and market position, will always be at risk of being overtaken by competitors who are willing to take on more risk and make bigger bets on new opportunities. Outsourcing gives you access to resources outside of the company so that you can grow into areas where there simply aren’t enough resources internally within the organization itself.
Outsourcing also helps companies enter new markets. If a company has been operating in one market for many years without any growth or expansion because it was too small or its focus was too narrow, then outsourcing could be just what they need in order to expand its reach while still maintaining high-quality standards in all areas including safety standards, etc…
It is clear that the recession has many companies struggling to keep their heads above water. With so much uncertainty in the economy, these companies need to be able to reduce their operational costs and increase productivity if they want to survive. Outsourcing to reduce costs could help them do both of these things by bringing new resources into their business model and allowing them access to more efficient workers with specialized skill sets.
The downturn can provide an opportunity to take a step back and evaluate their business model, reassess their core competencies and identify new opportunities.
Talk to CraftedQ experts today and understand the solutions we offer for your business.