Who wouldn’t prefer a full time employee to an outsourced service provider? We’re outsourced service providers ourselves and we would still choose full time Vs outsourced. It’s time to stop beating around the bush and face reality, even if it’s not what some of us want to hear.
Even with its perks, if money is not an issue outsourcing is not on the table even for discussion. For sure outsourcing is cheaper and requires fewer headaches than a full time employee. It also helps for a better, more targeted spend Vs result (mostly due to accountability). And to top all that, with the cost of hiring full time often 4 times that of a service provider – not to mention the recruitment agency fee – we still look into full time employees as the answer to our prayers that will lift us to the top of the food chain.
Outsourcing to a Service Provider is not an option yet
It takes a significant amount of time to realise you’ve made bad decisions. When you start counting your spend Vs income, when you quantify how much you progressed with your in house team and where you stand in the industry as a market player, you might start pondering on alternatives to your current structure.
You see market leaders constantly innovate, they push the boundaries further and unless you’re able to follow, the future does not look so bright. So are we doing enough? Is the knowledge of our team more than our own to help us push boundaries? The in-house team was hired to support our current functions, not to innovate and direct the business in new-found lands. We’re doing great as we are but are we moving further or are we involuntarily and unknowingly stagnant?
Could outsourcing to a Service Provider be an option?
There are two scenarios to consider; in the first one you know what you’re doing and you spot the problems before they become “make or break” holes draining your bank accounts. Outsourcing is now an option…
In the second scenario, you don’t know what you’re doing, the bank accounts drained already and the costs associated with your current structure are no longer viable. You then begin looking for alternatives, you decide to downsize and take over parts of the business that once belonged to your very expensive head of department. To make things even worse, all decisions are now biased and you’re looking for the cheapest solution to your business needs. And what do you know..? Outsourcing is also now an option…
If you are a forex broker operational for at least a year, surely you can associate with the second scenario, since most brokers raise share capital as well as enough operating capital only to start their business. This capital is then spent in the first year of operations in the battle to position the brand and make a name for yourself. There’s no income plan, no lead generation strategies, no feasible saleable product except the wishful thinking of the shareholder to position the brokerage through the people that will be hired.
Not everyone has the funds to support an in-house operation that is knowledgeable and skilful and like-minded to copy competitor’s successes and avoid failures. This type of team is immensely expensive, requires a lot of upkeep and is scarce to find. So good luck finding them, coordinating departments through them, paying and managing to keep them long enough to see the fruits of such operation return some profit.
For the average broker, that is 80% of the industry today these scenarios serve as reality check. If the above are not scenarios you can accommodate, you’re heading towards a low cost operation, with in-house teams that are only as good as the reason they accepted your low salaries. Not meaning to undermine anyone here, i’m positive they are good for what they’re hired to do, but that’s just about it. The boundaries we talked about before are the safe zone that you should get comfortable in, since that’s exactly where you’ll be staying.
Outsourcing to a bad Service Provider
In an ever increasing industry such as the consulting services industry, the possibilities are endless; countless agencies are popping up, ready to serve on a small budget, whispering all the right words you need to hear. Words that provide the feeling of “salvation” since they know that if you’re looking for help, you brought yourself at the brink of closing shop.
Given the amount of possibilities, narrowing down your options when biased, will also not really help your situation. By biased i mean bringing yourself to a point where you’re still looking for cheap solutions, quick profit and desperate enough to accept anything. Say goodbye to your values, company culture and initial vision. Say hello to chop shop operations, aggressive tactics, all the wrong reasons to be in this business until it’s really too late.
Outsourcing to a good Service Provider
As we’ve come to know, the best decisions are made when we’re strong and able to think clearly. There’s a reason Service Providers are in business and there’s no harm in evaluating outsourcing in the beginning steps of your operation. Evaluate all options when the business is strong, well-capitalised and allows room for changes that can be adopted fast. Educated decisions must be taken always based on industry standards and correct competitor analysis, not individual experiences.
Once there is a strong base and foundation set-up, be sure that you secured a few more years as an industry player and can reconsider your spend accordingly. An absolutely fantastic time to employ more full time employees and expensive heads of your departments. Important to note here that you will not be hiring to set up your structure anymore but to strengthen it, with their expertise and hard work.
Departments that are built around people are the most costly and least viable.
Departments that are built around industry standards, competitive analysis and decades of experience, will be with you for a long time.
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