Hiring a full-time employee is expensive, with estimates putting the cost per hire at three to four times the salary of each position. After you make a hire, you need to provide quality compensation (especially in a tight labor market where talent is at a premium). This includes paychecks, perks, and benefits, all of which quickly add up.
The danger of straining the budget through excessive hiring is very real, particularly for companies in the startup or rapid growth stages. Outsourcing is one way a growing brand can avoid the mistake of expanding its team too quickly.
Outsourcing is in vogue, but it’s also in flux. How are businesses delegating operations and … [+]
As is the case with hiring, though, you don’t want to just outsource anything to anyone. Here are some outsourcing trends that can help a healthy business stay on the straight and narrow as it grows in 2023.
1. Outsourcing Financial Leadership
Finance is always at the forefront of innovation. Fintech has been simplifying commercial activity for years now. Even when it comes to outsourcing, bringing in a third-party accountant is nothing new.
Where things are poised to change in 2023 is through the rise of outsourced financial leadership. A growing number of outsourcing companies are taking on the challenge of 10,000-foot financial decision-making for others.
Outsourced CFOs like the team at Aquifer (who refer to themselves as “Financial Jedis” with “professional financial expertise”) are offering plug-in finance departments that are specifically tailored to startups. These services help manage spending and maintain transparency from the late seed to series A stages.
Finance has always been a challenge to delegate. In 2023, outsourced CFOs will provide a long-overdue lifeline for struggling startups.
2. Outsourcing Marketing Management
Another area of the C-suite that is getting the outsourced treatment is the chief marketing officer. In this case, the current trend is to opt for a fractional CMO.
These are highly experienced marketing executives who contract with companies. Usually, this is for a handful of hours based on a monthly time frame.
Neal Schaffer is a fractional CMO and a good example of how effective the position is for clients and service providers alike. The outsourced executive helps multiple companies successfully market themselves at the fraction of the price of a full-time salaried CMO. Schaffer adds that the short contracts that come with fractional CMOs make them even more cost-effective since they don’t require lengthy tenures at a company.
Fractional CMOs are an ideal middle ground for startups and SMBs (small and medium-sized businesses) that don’t have the resources to hire a full-time CMO yet. They provide a limited amount of high-quality advice that can help guide a smaller company through its growth stages.
3. Business Process Outsourcing Continues to Grow
The previous two examples show how outsourcing is impacting the C-suite. But the truth is, the bulk of outsourcing activity takes place further down the org chart—and in 2023, that trend is set to grow even further.
One report by Grand View Research found that the global BPO (business process outsourcing) market reached a value of $261.9 billion in 2022. BPO is an aggregate term that refers to outsourcing a large variety of business functions, operations, and responsibilities to external service providers.
Platforms like Upwork and Power Publish are good examples of this outsourcing in action. They provide a fleet of freelancers and SMEs (subject matter experts) who can take content creation off of a smaller marketing team’s plate.
The savings and flexibility that the BPO market provides are attracting new players all the time. This is why Grand View projects the market’s compound annual growth rate to be a staggering 9.4% for the next several years, equating to the market more than doubling to $525.2 billion by 2030.
From the rise of outsourced CFOs and fractional CMOs to the explosive growth of the BPO market, there’s no doubt that delegating business activities to third parties will remain in the spotlight in 2023. As both the quantity and quality of outsourced responsibilities grow, it will be interesting to see how they set the stage for an increasingly smaller, intertwined global economy to interact in the future.
