There are no specific “best” examples of outsourcing in business, as it depends on a company’s unique needs. A survey revealed that 50% of companies outsource to enable a focus on core business functions. 20% do so to get better service and quality, and scale globally.
We’ve put together a list of over 10 examples of outsourcing for you below.
12 Examples of Outsourcing in Business
Here are a few powerful business outsourcing examples and real-life examples of outsourcing from different business areas
1. IT Services
Software development can be outsourced by a rapidly expanding tech company. A committed group of developers, project managers, and quality assurance experts will be supplied by the contracted company.
- What they do: From initial design to final launch and maintenance, they manage the full software development lifecycle. This includes tasks like coding, testing, and debugging.
- Benefit: This gives the startup access to high-level technical expertise without the cost of hiring and managing a full-time, in-house tech team. Additionally, it enables quick scalability to fulfill project deadlines.
2. Customer Service
A specialized call center can handle customer service for an online retailer with a global clientele. The outsourced firm will manage phone, email, and live chat support, often on a 24/7 basis.
- What they do: They answer customer questions, resolve issues, process returns, and provide technical support. They act as the voice of the brand, following specific guidelines provided by the company.
- Benefit: The company can offer round-the-clock support in multiple languages. This improves customer satisfaction and loyalty. It’s much more affordable than hiring a large, in-house support team.
3. Accounting
An accounting firm may be hired by a business to handle its bookkeeping and tax preparation. The firm will handle transactions and prepare financial statements. They will guarantee that all tax returns are timely and accurate.
- What they do: They record all financial transactions, manage payroll, prepare invoices, and handle accounts payable and receivable.
They also provide detailed financial reports and help with strategic financial planning. - Benefit: This lowers the possibility of expensive mistakes and fines. They guarantee financial accuracy and adherence to tax regulations.
Additionally, it frees up the owner’s time so they can concentrate on expanding the business.
4. Legal Services
A startup can outsource its contract review and intellectual property tasks to a legal process outsourcing (LPO) firm. The firm will conduct legal research, review documents, and manage compliance.
- What they do: They review large volumes of documents for lawsuits (e-discovery), draft legal agreements.
They also ensure the business is following all relevant laws. They can also help with patent applications and legal research. - Benefit: This provides access to specialized legal expertise at low cost than hiring an expensive in-house legal team.
The business gets legal support on-demand for specific projects, without a long-term commitment.
5. HR (Talent Acquisition)
A company looking to hire international talent can use a global HR platform like Remire.
The outsourced firm will act as an Employer of Record (EOR). They will legally employ the new talent on the company’s behalf.
- What they do: They handle all the local hiring paperwork, tax registrations, payroll, and benefits administration for the new employee. They ensure the company is fully compliant with local labor laws.
- Benefit: This simplifies global expansion. You do not have to deal with compliance issues or create a new legal entity in every nation. The company can hire the best talent anywhere in the world.
6. Manufacturing
A fashion brand can hire a factory to produce its clothing line. The entire process, including sourcing, quality assurance, and packaging, will be managed.
- What they do: They manufacture the products according to the brand’s designs and specifications. They also manage the supply chain and ensure the goods meet quality standards before shipping.
- Benefit: This allows the brand to scale production efficiently and at a lower cost. The brand can then focus entirely on design, marketing, and sales.
7. Logistics
A third-party logistics (3PL) firm can handle all aspects of order fulfillment for an online retailer. This company will manage inventory, warehousing, order picking, packing, and shipping.
- What they do: They store products, receive orders, pick and pack the items, and coordinate delivery. They also handle returns and provide real-time tracking information to the customer.
- Benefit: The retailer has access to cutting-edge technology and a skilled logistics network.
This improves delivery times and customer satisfaction. Retailer has no need to invest in its own warehouses and delivery infrastructure.
8. Marketing
A business can hire a marketing agency to handle its social media accounts. The agency will develop a content strategy, create blog posts, videos, and social media campaigns. They will also analyze the performance.
- What they do: They manage social media, plan and produce content, and carry out focused advertising campaigns. They also provide detailed reports on campaign results.
- Benefit: The company gets a team of marketing experts, including writers, designers, and analysts, for a predictable cost.
This provides a fresh perspective and access to the latest tools and strategies to grow the brand.
9. Cleaning Services
A large office building outsources its daily cleaning and maintenance to a professional cleaning company. A skilled workforce, all required tools, and cleaning materials are provided by the contracted company.
- What they do: They dust, vacuum, and sanitize, among other cleaning duties. They also manage waste disposal and ensure the entire building is kept clean and safe.
- Benefit: The office building gets high standard of cleanliness and hygiene without having to manage a large janitorial staff.
This removes the hassle of hiring, training, and supervising employees for a non-core function.
10. Business Development & Sales
A software company trying to break into a new market can outsource its lead generation to a sales agency. The agency will identify and qualify potential clients. They will set up meetings for the company’s in-house team.
- What they do: They conduct market research, find target customers, and perform initial outreach through phone calls and emails.
They then hand over “warm” leads to the company’s sales team. - Benefit: This accelerates market entry and fills the sales pipeline with qualified leads faster and more efficiently.
The company’s internal sales team can then focus on closing deals rather than on prospecting.
11. Software Testing
A company that develops its own software can outsource the testing and quality assurance process to a specialized firm. This includes manual and automated testing.
- What they do: The outsourced team will test the software for bugs, performance issues, and user experience flaws.
They create detailed reports and work with the development team. They guarantee that a superior product is prepared for release. - Benefit: By bringing in an independent team, the company gets an unbiased and objective review of its software.
This helps find critical errors before they reach customers, saving time and protecting the brand’s reputation.
12. Virtual Assistants (Admin Tasks)
A busy executive or small business owner can hire a virtual assistant (VA). The VA works remotely and handles a wide range of administrative tasks.
- What they do: They manage email inboxes, schedule appointments, handle travel arrangements, perform data entry, and organize files. They are essentially a personal assistant without the need for office space.
- Benefit: This frees up time to focus on strategic, high-value tasks. It’s a cost-effective solution. Without the overhead of a full-time employee, you only pay for the hours you require.
13. Financial Planning and Analysis (FP&A)
A growing company that needs a higher level of financial expertise but can’t afford a full-time CFO. They can outsource their FP&A functions.
- What they do: The outsourced firm provides a “fractional CFO” or a team. They will handle budgeting, financial forecasting, and in-depth performance analysis.
They help the company make smarter business decisions based on financial data. - Benefit: The company gains access to a senior-level financial expert for a fraction of the cost of hiring a full-time CFO.
This provides strategic guidance to improve cash flow and long-term financial health.
Benefits of Outsourcing for Your Business
Outsourcing is more than just a way to cut costs. It can boost productivity, encourage expansion, and give an edge over competitors.
Here are the key benefits:
- Cost Reduction: This is frequently the main driving force behind outsourcing. By contracting with a third-party provider, businesses can significantly lower operational costs. Furthermore, outsourcing to regions with lower labor costs can lead to substantial savings.
- Access to Specialized Expertise: Instant access to a worldwide talent pool is made possible through outsourcing. You can hire top-tier specialists for specific tasks, like cybersecurity, legal compliance, or advanced software development. All without the long and costly process of recruiting them in-house.
- Increased Efficiency and Productivity: By offloading non-core or repetitive tasks, your teams can focus on their primary tasks and strategic initiatives.
- Scalability and Flexibility: Outsourcing allows your business to be agile and responsive to market changes. Scaling up services for a particular project or during busy times is simple. Then, without committing to hiring or firing permanent employees, scale back when demand declines.
- Focus on Core Business Functions: Every company has tasks that are necessary but not directly related. By outsourcing functions, you can free up valuable resources and management time.
- Risk Mitigation: Outsourcing shifts a portion of the business risk to the third-party provider. This enables you to manage risks that fall outside of your primary business expertise.
- 24/7 Operations: When you outsource to a company in a different time zone, you can achieve a “follow the sun” model. This means that work on a project or customer support can continue around the clock.
When Should You Consider Outsourcing?
Knowing when to outsource is a critical business skill. It’s not about offloading work just for the sake of it. It is about making a strategic decision to support your business goals.
You should consider outsourcing when you encounter one or more of these common situations:
1. You Need Specialized Expertise
Although your internal team is very good at what they do. They are not able to be specialists in every field. if a project calls for a certain set of abilities.
Such as advanced cybersecurity, complex legal knowledge, or a specific software language. And it’s not your core function, outsourcing is the most cost-effective way to get the job done.
2. Your Team is Overwhelmed
Are your employees constantly working overtime or falling behind on deadlines? When your team is stretched thin, productivity and quality can suffer.
Outsourcing non-core tasks can free up your internal staff, allowing them to focus on high-priority work and avoid burnout.
3. You Need to Reduce Costs
Hiring a full-time employee with a competitive salary, benefits, and training can be a significant expense.
If a function doesn’t require a permanent position, outsourcing allows you to convert that fixed cost into a variable one.
4. You’re Focused on Non-Core Activities
Are you or your key employees spending a alot of time on tasks like payroll, bookkeeping, or data entry?
Even though these jobs are essential, they don’t bring in money. By outsourcing them, you can re-focus your energy and resources on activities that drive growth.
5. You Need to Scale Quickly
Your business is experiencing rapid growth, but the hiring process takes too long. Outsourcing provides a fast and flexible way to scale your operations.
A third-party provider can quickly assemble a team to handle increased demand. All without the typical time and expense of recruitment and onboarding.
Non-examples of outsourcing
Non-examples of outsourcing are activities that a company either performs in-house or acquires as a standard purchase.
Here are 5 non-examples of outsourcing:
- Insourcing: Performing a task or function using your own company’s internal employees and resources. (e.g., your company’s HR department handles payroll).
- Purchasing Standard Goods/Supplies: Buying general items that are not a unique service or core function. (e.g., purchasing office furniture, paper, or cleaning supplies).
- Hiring Someone for a Specialized Task You Don’t Do: Engaging an expert for a one-off task your firm never would handle internally. (e.g., hiring a law firm for court representation or an architect for building design).
- Buying “Off-the-Shelf” Software: Purchasing a standard, ready-to-use software product or market data service. (e.g., subscribing to Microsoft Office or Bloomberg data feeds).
- Relocating a Business Function Without an External Provider: Moving a company-owned department or factory to a different country, but it remains managed and staffed by the original company. (This is ‘offshoring,’ but not ‘outsourcing’ unless a separate company is hired).
What are the 4 types of outsourcing?
Here are the four types of outsourcing based on location and technology, providing an example of outsourcing geography:
1. Onshore Outsourcing: This is when you hire a company within your own country.
- Benefit: There are no cultural or time zone barriers, and communication is simple. You also deal with the same laws and regulations.
2. Nearshore Outsourcing: This means hiring a business in a nearby or neighboring nation.
- Benefit: This offers a good balance of cost savings and easy communication. Because of the small time difference, cooperation is easy.
3. Offshore Outsourcing:This is what happens when you work with a company in a far-off nation. It is used often to access a different talent pool or lower costs.
- Benefit: It can significantly reduce labor costs and gives you access to specialized talent that might not be available at home.
4. Cloud Outsourcing: This involves using cloud-based
services and platforms instead of managing your own IT infrastructure.
- Benefit: It’s highly flexible and scalable. You can access powerful tools and services without investing in expensive hardware or software.
What Distinguishes Offshoring from Outsourcing?
Feature | Outsourcing | Offshoring |
Definition | Delegating work to an external company. | Moving a business function to another country. |
Primary Focus | The relationship with a third party. | The location of the work. |
Who Does the Work | An external company, which could be local or abroad. | Your own company’s employees in a foreign country. |
Why Do It? | To leverage specialized expertise and lower costs. | To take advantage of lower labor costs or different tax laws. |
Examples | Hiring a local accounting firm. | Opening a new customer support office for your company in another country. |
How Remire helps you make outsourcing a success?
When you’re ready to build a global team, Remire handles the hard parts for you. Our platform is the only solution you need to manage your entire global workforce, from hiring to payroll.
For Employers:
- Hire the Best Talent: Find and hire talent anywhere with our Global HR Solutions and Hire Global Talent support.
- Full Compliance: We act as your Employer of Record (EOR) to handle all Legal & Compliance and Visa Support.
- Effortless Management: Manage Payroll Management, Contractor Management, HRIS, and Background Checks all in one place.
- Team Support: We provide Competitive Benefits, Workspace Solutions, and Equipment Support to keep your global teams happy and productive.
For Your Entire Team:
- For Founders & C-Suite: While we take care of the operational details, concentrate on strategy and expansion.
- For HR: Streamline hiring and onboarding with a single, easy-to-use platform.
For Finance: Simplify global payroll and ensure financial compliance with ease.
Ready to take the stress out of running your business?
With Remire’s outsourcing solutions, you can hand over time-consuming tasks like payroll, HR, compliance, and recruitment , while you stay focused on growth.
Outsourcing: The Path to Growth
As this guide has shown, what is the best example of outsourcing? You now have an idea that outsourcing is far more than a way to cut costs. It’s a powerful strategy that gives your business a competitive edge.
Selecting the appropriate partner is essential to gaining access to these advantages.
In an interconnected world, your ability to hire and manage talent across borders is your greatest asset.
Remire is built to simplify this process, turning the complexities of global HR, compliance, and payroll into a seamless experience.
