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When Outsourcing is NOT a Dirty Word

November 13, 2017 in Small Business and Entrepreneurship

We’ve all heard about the advantages of outsourcing for smaller organizations.  In general you likely can’t afford full-time, high- quality employees, and all the hiring and benefits costs, in every department of business.  That said, some areas are more ripe for outsourcing than others.  Sometimes your particular service or product may place a premium on one of these areas so they might not apply to you, but, in general, most companies should at least look into outsourcing payroll and HR, cyber security, and SEO.

OUTSOURCING PAYROLL AND HR 


Payroll may at first glance look like something you can handle in-house.  If you only have a handful of employees, it is easy enough to calculate their pay (especially if they are salaried) and cut their checks.  Unfortunately, there are a lot of risks associated with processing your own payroll and it can end up costing you a small fortune. 

Substantial fines can be given for:

late filing of payroll taxes

completing the form incorrectly

withholding the wrong amount

There are a lot of regulations (that differ from state to state) about what you must notify the government about.  Immigration forms (I-9’s) have to be completed for all employees, states require notifications so that they can track parents that owe support, cities may require head taxes be paid, you may be misclassifying your employee as non-exempt or paying via 1099 when you should be withholding payroll tax, and the list goes on and on.  These fines and penalties can really add up and the stress of trying to figure this all out can do you under.  Plus, if you choose to go with a PEO (also referred to as “co-employment") you can assess larger and often better insurance plans and sometimes other benefits which can really up your game as far as attracting the best talent for the critical position that you hire for.  Plus, the HR staff there can help you to avoid possible pitfalls at the end of an employment arrangement as they are experienced enough to have generally seen it all.

OUTSOURCING CYBERSECURITY 


Cybersecurity is another area of business where outsourcing really makes sense.  For many of us today, data is our biggest asset, right after our employees.  This means we have to protect our data and that requires an investment.  It used to be said that if your business  were small enough, it  would never be targeted by hackers, and you could probably get away with not spending much on cyber defense, but, things have changed.  The new and very successful hacking model targets a lot of little companies. They pay out a smaller amount of money than larger companies, but hackers are concerned about the accumulative quantity that is paid out more quickly. The WannaCry ransoms cost $300 to $600 per infected computer.  It’s hard to take a real critical look at your systems from the inside, so even if you have an in-house IT person or a strong MSP, you may want to consider at least getting a security audit periodically to assess the trust nature of risk that you might be facing.  It’s much more likely for new eyes to see the holes and they are really well trained to know where to look for them.  Make sure you hire someone that will provide you with a written report and that they will walk you through their findings so you can understand the risks you face and prioritize your solutions (either with them or with other team members).  The general math says that IT Security spending tends to run about 6% to 7% of a company’s budget (and the percentage increases with size).

OUTSOURCING SEO


There are 1.2 trillion Google searches EACH DAY! As you are well aware, you are not getting discovered if your business is not on the first page of Google for the keywords the best represent what your business does. SEO (Search Engine Optimization) strategy, otherwise known as appeasing Google, changes often. The reason strategy so often changes is due to search algorithm updates. With each new algorithm released, Google becomes smarter- with the goal of providing the most relevant search results possible. Google assigns more weight to  indicators of web-page relevancy. In turn, SEO agencies learn to craft web pages to rank higher based on what Google deems most important. For small businesses, it makes sense to outsource this because there are many technical details that go into creating web pages. 

Here is a list of just some of the items that Google ranks your website for:

- The experience a visitor has on your website 

- Quality of links to and from your website 

- The amount of keywords your site has that match what is being searched for 

- Meta description tags 

- Image and other media optimization 

- A quality sitemap 

Because of all the complexities of SEO, outsourcing this important function is a good idea. 

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There are obviously limitless options as to parts of your operations to outsource.  Different areas may make more or less sense for you.  Be sure to do good research and spend the time to really get to know the consultants that you hire and how they can support your goals.  Also, don’t be fooled into thinking that once you sign that agreement your work is done.  Just like staff, consults do have to be managed.  You should establish regular communications and feedback so that all parties can find success.  From my experience with small to mid-sized companies, these seem to be the areas that have made sense over and over again. 

Angie O'Connell

Angie O'Connell

Angie earned an BA in Arts & Humanities, and an MS in Finance. Here at LIVE, she controls finances, works with vendors, enters data and talks to clients about billing questions. Angie has lived basically her entire life in Colorado and most of it in Arvada. She met her husband in Ft. Collins during college and they have been married for 25 years.They have 2 grown kids and they are Angie's greatest joy and pride. She loves spending time with family, just hanging out, and enjoying movies, music, and books.

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