More organisations are turning towards outsourcing

It has been more than four months since South Africa joined the rest of the world and entered into a national lockdown to try curb the spread of the coronavirus.

Since then a series of socio-economic events have unfolded with more than 3 million people facing unemployment and numerous companies, especially Small Medium and Micro Enterprises (SMMEs) closing down. South Africa was already in a technical recession before the lockdown, but the shutting down of industries further exacerbated our economic woes, with the unemployment rate now sitting at 30.1%.

Businesses seeking to survive the economic downturn have been forced to research and implement innovative methods. One approach that has produced tangible results both internationally and on local grounds is that of outsourcing.

Outsourcing offers multiple benefits to companies looking to survive the current pandemic and beyond, grow their business offerings or streamline costs by saving money. More organisations are turning towards outsourcing solutions. In 2019, the outsourcing market, (business process outsourcing) was worth around R1.3 trillion ($92.5 billion) according to Statista, having clocked in at R1,2 trillion ($85.2 billion) in 2018.

Arnoux Maré, Managing Director of Innovative Staffing Solutions employing close to 20,000 people across South Africa in various industries including transport, mining, engineering, logistics, agriculture, construction, retail, hospitality and many more industries, makes the case for outsourcing by highlighting the methodology’s 5 benefits.

1. Outsourcing saves money and cuts costs, furthermore, according to Deloitte, it allows managers/employers to focus on their core business functions. This allows management to play a more strategic role by concentrating on other crucial aspects, such as operations and the financial growth of the business rather than having to deal with routine issues and activities.

2. Entrepreneurs have to wear multiple hats in their businesses, but the truth is, no-one can do everything, especially now when most companies have had to reduce their staff complement. Outsourcing solves business-related capacity, such as filling in roles that a company may not have in-house. It gives businesses access to a skilled talent pool that would otherwise be beyond their reach to assist them in attaining their organisational goals.

3. Some of the top challenges businesses face, include hiring new employees; increasing profits; employee healthcare; growing revenue and managing cash flow. Through outsourcing, companies can eliminate two of those challenges; the need for hiring employees and providing them with healthcare. For example, Innovative Staffing Solutions provides all its employees with medical aid and provident fund. They also take over skills development; disciplinary hearings and payroll management, which bolsters their clients’ profits; revenue and cash flow.

4. When businesses outsource their functions and staff, they are quicker to innovate, which improves their customer experience and can decrease their prices of service delivery thus making them more competitive.

5. When businesses outsource their operational needs to an outsourcing partner like Innovative Staffing Solutions, they gain the proficiency of labour relations experts that bring years of experience to complex outsourcing projects. This leads to an increase in productivity and efficiency in the process thereby contributing to the organisation’s bottom-line.

In a business environment characterised by a fluctuating market, downgraded economic conditions, high unemployment rates, skills shortages and labour unrest, more and more companies are seeing the wisdom of choosing to outsource as the best survival and growth strategies in their business toolkits.

Arnoux Mare, MD of Innovative Staffing Solutions

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