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Small Businesses Are Increasingly Turning to Outsourcing to Meet Labor Needs

Small Businesses Are Increasingly Turning to Outsourcing to Meet Labor Needs

By | 04.01.13
Small Businesses Are Increasingly Turning to Outsourcing to Meet Labor Needs

Small businesses are beginning to follow the lead of corporate giants in shifting from in-house workers to outsourced labor pools. Like corporate America, small businesses have found that by choosing to hire freelancers both at home and abroad, they are able to save a substantial amount of money while more effectively meeting their company’s current needs. In a recent survey of 837 small businesses in the United States conducted by freelance broker Elance, 78 percent of business owners conceded that hiring freelancers gave them a distinct edge over the competition—an edge that’s become increasingly critical in today’s tight market.

Those small businesses surveyed by Elance cited several benefits to outsourcing over in-house employees. At the top of the list was the fact that the majority of those surveyed reported that by hiring freelancers they were able to cut costs by at least 50 percent. Not only does outsourcing provide these important cost savings, but it fosters a much faster hiring time and also provides businesses with access to talent that wouldn’t otherwise be available in their local area. In addition, by using sites like Elance (as well as Freelancer, PeoplePerHour, and other similar forums), small businesses are much better able to meet their ever-changing labor needs and be more flexible to market fluctuations, all while saving a significant amount of time on the paperwork that’s necessary with traditional hiring.

It’s important to note that at this point, this marked shift toward outsourcing does not necessarily translate to more jobs being lost to overseas providers. In fact, on the Elance site, U.S. freelancers remain the number one provider of services to U.S. businesses. However, Jose Pagliery of CNN predicts that this is likely to change, as the global labor pool is able to bid for jobs quite competitively since their costs of living are much lower than in the U.S. Add this to the fact that outsourcing overseas to workers in different time zones means that business owners can run 24/7 production lines (making them much more competitive in today’s markets), and the growth of foreign freelance labor used by small businesses in the U.S. seems probable.

References:

Pagliery, Jose. “Even Small Companies Are Outsourcing.” CNN Money. 3/28/13.

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