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PeoplePerHour.com founder and chief executive Xenios Thrasyvoulou on why outsourcing could be the answer to your all your business’ HR needs Until recently, outsourcing was generally associated with large corporations establishing major business functions abroad. The media propagated the commonly-held perception of large companies outsourcing to cut costs and boost profit margins.
Most notoriously, sub-continental call centres exemplified many peoples’ notion of outsourcing – a perception commonly associated with customer service and satisfaction being compromised in the name of a ruthless drive to boost bottom line profitability.
Outsourcing is now evolving beyond this narrow picture of a much-maligned business practice. No longer is it the preserve of faceless multinationals. It’s increasingly favoured by businesses – large and small – as an efficient, flexible and cost-effective HR option.
The internet is at the root of this development. Today, successful small businesses harness technological advances in communications to build enterprises which are leaner and more flexible than ever before.
This has resulted in small businesses gaining clout in the economy. We’ve seen large complex industries – from computing to airlines – being revolutionised by unassuming start-ups who changed the rules of the game overnight.
The entrepreneur of the 90s wanted scale from day one. This meant large office space, overpaid staff who over-engineered products while flying first class to Silicon Valley to present their pitch to VCs who overpaid to get a slice of their over-valued companies.
The inevitable crash of the biggest bubble in history and its aftermath meant entrepreneurs got smart, real and practical. Today they start with only an internet connection, mobile phone and £20k debt on credit cards
These factors are central to the increasing popularity of outsourcing among small businesses. Coupled with this is the fact that the internet has opened-up a world of freelancers and contractors with the skills to deliver specific projects efficiently and cost-effectively – with minimal risk to the cash-poor entrepreneur.
This small business outsourcing trend is actually reflective of a general shifting balance from large to small business economies in the developed world. In Europe, small businesses now account for more than 95% of all enterprises. The $200 billion outsourcing industry which has grown since the eighties is simply changing to reflect this.
Like most step changes or paradigm shifts, significant demand and supply drivers converge to instigate them. However, a factor often overlooked is that for demand to meet supply, there needs to be a medium of exchange. There needs to be a ‘marketplace’. With the web as the underpinning facilitator, this has led to the advent of online marketplaces. These sites simply bring those market forces together in a regulated and monitored environment.
The web has provided the perfect medium to express these market forces. How else could a small business find a highly-skilled freelancer in India to deliver a project for a fraction of the cost of a local contractor?
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