The Most Common Industries That Are Benefiting From Outsourcing Jobs

Outsourcing jobs helps businesses meet the needs of a rapidly changing world of commerce

Key takeaways:

  • Advances in global communications have made businesses more competitive
  • The finance, healthcare, and insurance sectors are three common industries that benefit from outsourcing
  • Outsourcing saves labor costs, time, and energy
  • Outsourcing can help growing companies scale and ease expansion pains

Digital communication has helped businesses communicate with customers easier and faster. While many companies would have remained local businesses years ago, technology and the internet have enabled these companies to thrive globally. One big catalyst for this new, global way of doing business is outsourcing.

Why do businesses outsource jobs? Which industries do it the most? This guide will reveal the industries that outsource the most, the advantages of outsourcing, and why it may be the answer for your growing business

Understanding outsourcing

It’s now common for companies to hire outside contractors or other companies to complete tasks that would’ve previously been done internally. Known as ”outsourcing,” this practice helps companies stay competitive and lower their costs, among other benefits. 

Companies commonly outsource tasks like:

  • Customer service
  • Manufacturing
  • Shipping
  • Sales
  • Marketing
  • Graphic design
  • Competitor research
  • Social media management

These are only some examples, too. Businesses worldwide are discovering more ways to outsource each year.

Which businesses are most likely to outsource?

Some industries are particularly suited to outsourcing. Although almost all industries can outsource duties, below are the ones that use it the most. 

Health care

Running a health care operation is complicated. Every patient comes with a lot of paperwork. Between maintaining HIPPA compliance, reviewing insurance documents, and going over other requirements, hospitals and healthcare providers are finding that outsourcing is the time and money-saving solution they have been looking for.

Hospitals and clinics provide patient care but they also have to operate as businesses. Health care companies use outsourcing to lower expenses by reducing administrative costs, find a global talent pool, increase quality and efficiency with new technology, and more. 

Shipping and mailing

One only has to look at the United States Postal Service to realize that most shipping and transportation companies don’t have a large profit margin built into their business model. To keep their heads above water, transportation and mailing companies need to operate at peak efficiency.

Juggling the day-to-day tasks of shipping products to customers takes  a ton of time. By using outsourcing, these companies can save hours each day. Some of the tasks shipping companies outsource include:

  • Bills of lading
  • Customer invoices
  • Air Waybills
  • Customs forms
  • Customer service

By outsourcing these tasks, shipping and mailing companies get more time and energy to handle the United States’ shipping needs.

Retail

Many large retail companies manufacture and sell goods directly to their customers. To deal with the daily operations of handling both product manufacturing and selling, outsourcing can help them manage customer communication.

Millions of pieces of mail pass through these companies every month. Trying to keep up with the demand often overwhelms companies. They delay getting back to customer requests and customer satisfaction drops. Outsourcing allows these companies to focus on what they do best, making and selling products.

Utilities

As competition for customer dollars heats up, utility companies have had a hard time keeping up. They are fighting not only competition but also their own failing infrastructure. With many of their practices decades out of date, they are trying to hang on, even as profits shrink.

Like any niche company selling directly to consumers, there are stacks of paperwork and data to process. Billing, invoicing, and customer service issues can all be outsourced, giving these energy companies breathing room in their daily operations.

Finance

The days of local, in-house banking operations are rapidly going the way of the dinosaur. Recessions have taught the banking industry that their practices were not cost-effective. But there are many ways outsourcing helps banks increase their efficiency, such as: 

  • Improve daily operations
  • Boost speed
  • Reduce operational risks
  • Centralize functions

Surprisingly, while outsourcing has existed for decades, the financial industry has only recently begun to embrace its benefits.

Government

Is it surprising to learn that outsourcing can help government operations? The government at the local, state, and national levels has to monitor and interact with its citizens. That’s a lot of data to manage. Letters, notifications, and other forms of snail mail must be sent out and categorized.

The U.S. government has discovered the hidden benefits of outsourcing and hires contractors for approximately 300,000 jobs a year. Outsourcing also gives the government access to a wider, better talent pool. 

Insurance

Between government regulations and dealing with pharmaceutical companies and healthcare providers, it’s no wonder insurance companies are prime candidates for outsourcing. Their customer data systems alone provide giant, constant tasks. 

Some tasks that insurance companies outsource include:

  • Mailroom management
  • Content management
  • Data capture
  • Customer service
  • Various administrative duties

The choice to outsource

There is usually no single reason companies decide to outsource. The increase in competition from a global economy has seen many companies in several industries have a hard time adjusting to the new normal of digital communication.

Spreadsheets detailing the benefits of outsourcing jobs

Instead of seeing their profit margins shrink as they inch closer to extinction, companies have used outsourcing as an efficient way to pivot and thrive. Here are some of the most common reasons businesses outsource:

1. To reduce labor costs

As companies feel the crunch from rising wages and the weight of paying for benefits, outsourcing has become a way to avoid these added costs. Outsourcing jobs saves companies money on creating space for workstations, equipment, and even training.

Many sources of outsourced labor are in countries with a lower cost of living. Workers in the U.S. may scoff at some of the lower wages these overseas workers earn. But to the workforce in the Philippines and other countries, the pay they earn is perfectly acceptable for their standards of living. The best part? The workers’ benefits are already factored in.

2. To save time

If you take a cold, hard look at how much work is done in a typical eight-hour day, you may be surprised. An endless array of meetings, answering emails, phone calls, and other timewasters sap the efficiency and energy of even the most dedicated worker. Outsourcing allows you to have temporary help for only the tasks you need completing. 

3. To focus on what they do best

This may be the most important reason to outsource tasks. As small companies grow, their resources are stretched thin. Eventually, they are no longer focused on what brought them to the big game. An endless array of minutia takes employees and bosses in the company away from what they are best at, resulting in lower product quality, poorer customer service, and stalled growth.

Outsourcing can help your company operate at a top level as it grows. The result? A company that matches its growth with precision and efficiency.

4. To help them grow affordably

Closely related to number three, outsourcing helps companies expand their operations as needed. New workspace, additional training, salaries, and an array of other worries add a lot to your plate when you open new locations, especially overseas. By outsourcing, you remove a lot of the headaches these expansions can cause.

As new locations are established, you can easily pull back on labor needs from the initial expansion. 

Outsourcing could be your best solution

Many industries today are reaping the rewards of efficient outsourcing. Outsourcing has grown a lot from its beginning and it’s more than just a way to save money on labor. It can be a key ingredient to your company’s growth in an ever-changing world.

If your day-to-day operations or labor costs are suffering because of increasing competition or your business isn’t able to scale efficiently, outsourcing may be the answer for you. Contact us today for a free consultation to find out how Doxa can harness borderless talent™ to help your company increase its profits and productivity.  

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