The quality of your organization depends upon the quality of people and the work they do. You depend upon them to effectively perform essential operations relating to fiscal, human resources, compliance and information technology. However, when you are a small to midsize entity, it may not be feasible to provide the in-house services required to operate efficiently.
Therefore, it may be advantageous to consider some kind of partnership, merger, acquisition or opportunity to outsource backend services. Here’s why:
Outsourcing promotes responsibility
Outsourcing may be the most innovative and responsible way to manage the needs of your organization. Ask yourself, would outsourcing my needs be more cost-effective? A need in your organization will cost you, but there may be a more responsible way to meet this need than a traditional hire.
Through outsourcing partnerships, you are only getting what you need. These partnerships offer the opportunity to evaluate that need in the light of what you’re purchasing, as well as the ability to scale up or down as needed.
When you’re working on a tight budget, you can trust the quality of outsourced work without having to spend time and resources on training a new hire. Consider the cost to hire a chief financial officer internally or to outsource those services. Outsourcing may save money in the long term, because you have consistent access to the professional without the full-time cost.
The plague of over-hiring often affects us most when we see a gap in our operations and think a new staff member is going to fill it. As leaders, we have to avoid hiring people and then diluting their role to the point they’re no longer effective.
For example, organizations may hire a human resource person because of the perceived need. The new hire works for 40 hours per week, but realistically only 20 hours of HR work is needed. As a result, the new hire may absorb other tasks outside of her expertise in order to stay busy.
This busyness is different than on-the-job learning, because she is most likely taking on tasks unrelated to the reason she was hired. This happens across various business sectors, both for-profit and nonprofit. When it does, your expenses end up not matching your need.
Resist the tendency to hire employees to fill a void. Instead, we must begin to accept the idea of strategic outsourcing partnerships as a viable, cost-effective solution. We shouldn’t be tethered to the mindset that all staff working at our organization have to be our employees.
The perception that you lose power and control with outsourcing is simply a myth. In fact, it gives you more freedom to select the best resources to push your company forward without the HR risks that come with traditional hiring.
Embracing strategic outsourcing partnerships is a way to use resources more effectively and promote administrative responsibility.
Michael P. Robb is the Executive Director of Alliance for Nonprofit Resources. He is also the executive director of sister companies Center for Community Resources and Nonprofit Development Corporation. His forward thinking and innovative mindset led CCR from nearly closing its doors to operating with an $8 million budget, not including the tremendous success of ANR and NDC. Mike currently oversees more than 60 programs, which are available to over 180,000 residents in our region.