Chart showing Why Do Companies Choose to Outsource Work

Why Do Companies Choose to Outsource Work?

Building and running an ecommerce business to success requires managing many different aspects of the brand. Whether that’s digital marketing, product sourcing, customer service, or others, they all require a ton of time and effort.

To stay on top of all of them, businesses can choose to outsource the work and reap the benefits it offers. So why do companies choose to outsource work and what advantages does it offer? Here’s a look at some of the top reasons companies outsource.

Top reasons for outsourcing

According to a recent survey studying brands’ top outsourcing reasons, having more flexibility and adaptability is the most popular motive for businesses to hire external contractors. As many as 21% (or one in five) of respondents cite it as one of their outsourcing reasons. This is followed by increased efficiency, which 19% of businesses say is one of the reasons for outsourcing. 

Getting external help means freeing up time and energy to handle other parts of the business. It’s no wonder that 16% of brands say one of their top outsourcing reasons is having increased available resources, and 11% say it frees up employees’ time for other projects. By delegating some of their work, brands can focus on more important parts of their business, such as growth and expansion.

Outsourcing yields more than just time- and resource-related benefits—it also helps with gaining knowledge. One in 10 businesses list being able to receive help and guidance from external experts as one of their outsourcing reasons. This can help businesses in the long run, as the insight and skills gained from engaging with expert service providers can contribute to employees’ abilities to work more intelligently and efficiently.

Better risk management is also a key reason businesses outsource, with as many as 9% listing it as a motivation to outsource.

Efficient finance management plays a role in businesses’ decisions to outsource too. 7% of brands say they outsource because it’s cheaper than hiring a worker in-house, and another 6% say outsourcing gives them better tax breaks.

Even though there are plenty of advantages to outsourcing, there are certain business processes that brands prefer to hire contractors for over others. Here are the top functions that businesses outsource:

  • Accounting: 6%
  • Digital marketing: 6%
  • Customer service: 4%
  • Recruitment/human resources: 4%
  • Virtual assistant: 4%
  • IT services: 3%
  • Development: 3%

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