Outsourcing Agency Operations: Why, When, and Where? (Part 1)

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The first of a two-part series on outsourcing, Steve and Ryan discuss opportunities for agencies to maximize profitability through the outsourcing of operations. They look at why agencies should consider outsourcing, when it is appropriate, and review some popular platforms where agencies can connect with talent worldwide to enhance their capabilities and value proposition—all without needing to hire any new full-time employees.

Full Recap

Strategic outsourcing is one way to maximize profitability through operations.  In this first of a two-part series on outsourcing, Steve and Ryan discuss individual and project outsourcing.

One reason agencies should consider outsourcing as a strategic option is changing agency demographics. With the frequent turnover of agency staff and more employees retiring, agencies are having an increasingly difficult time finding the staff to fill vacant positions. Outsourcing can provide a good option to help take on some of the extra workload. In addition, by successfully identifying those tasks that they can move away from internal operations, agencies can free up agency owners and producers to focus on more high value tasks. (1:30)

There are two areas where agencies have the most significant opportunity to consider outsourcing of tasks:

1) Executive and Virtual Assistants:

There was a time when most executives had an in-office executive assistant (EA) who acted as a gatekeeper of sorts, handling the scheduling of appointments, travel arrangements, the executive’s calendar, and answering the phone calls. This person would handle many of the tasks the executive needed done but should not really do themselves.

Today, hiring a virtual assistant is a good option for handling similar, lower-value tasks. A VA might be someone an agency hires for as few as five hours a week, or it could be full-time, but they are not necessarily physically located at the agency. Steve notes that while the practice of hiring VAs is relatively common among executives, in general, it is underutilized by agencies.

Typically, a VA is a good option to support agency owners and producers who may be less skilled at more detailed, back office. A VA may be able to do that same work faster and better than the agency owner or producer and, by reallocating this type of work, it allows the agency owner or producer to focus on the higher value work that they are more uniquely skilled to handle. Outsourcing this type of work also helps the agency owner or producer to spend more time doing the things they enjoy outside of work.

Steve explains that his test for whether to outsource work is to ask himself this question:

“Is the work I am doing $20 per hour work or $1000 per hour work?”

“If the answer is $20 per hour work, it should be outsourced.” 

Steve adds that part of the success to be had from outsourcing depends on a person’s willingness to “let go” of (and trust someone else to handle) those lower value tasks.  You must be willing allow someone to help you.  (3:05)

2) Project Outsourcing:

Typically, agencies will have specific and well-defined projects, of short duration, that they can look to outsource (e.g., creating a YouTube video).  By outsourcing projects, agencies can enhance their capabilities and their value proposition in ways they never imagined possible—all without needing to hire someone full-time. There are experts across the globe who are skilled in nearly every project type an agency needs help with, and who will (most often) do the work more quickly and at a price lower than someone local would.

For the best results, agencies must clearly define the project and be sure they know, and can communicate, the specific goals of any project they choose to outsource.  (8:10)

Example of an outsourced project:

An agency had developed a worker’s compensation program and had a very specific 12-step program designed to help their clients better develop their workers compensation program. The agency wanted images created for each of the twelve steps, so they went to an online platform where they submitted the specific requirements of the job and posted a request for proposal. Those freelancers on the platform with relevant skill sets were notified about the project and bid on it. The agency then reviewed the bids, reviewed a portfolio of the freelancer’s prior work, saw the freelancer’s number of total projects, their earnings on the platform, their star-rated reviews, and more, and used that information to vet candidates.

The agency chose their top candidate and received the completed project, per their specifications, for a rate of just under $300.  (9:45)

Platforms like the one used by this agency connect those people with a wide variety of services and skills they want to sell –legal work, business plans, infographics, videos, software development, etc.— with those people who need projects completed.  In fact, according to Ryan, there is probably not a single problem an agency has that they could not find someone on one of these platforms to do.  (12:05)

Tips For Maximizing The Benefits Of Outsourcing Platforms:

• Tightly define your project from the beginning. By using as much narrowing criteria as possible to filter eligible candidates up front (by location, languages spoken, experience, star rating, etc.) you spend less time vetting responses later.
• Don’t be afraid to go overseas. By opening your project to a global network, an agency, no matter how small, can tap into the skills and abilities of people all over the world.
• Use common sense when it comes to using overseas providers.  While it may make sense to use an overseas provider for many projects, other higher security projects (e.g., analyzing agency management data) may be better left to business associates agencies already know and have worked with before.

(15:05)

A Few Popular Outsourcing Platforms & Resources:

99designs.com  –  Great place for graphic design work, including logo design, PowerPoint templates, web design, and others.  Allows you to submit project specs and community will return design ideas.  You narrow top choices to finalist in quick, contest-like process.  You retain legal rights to work.  Offers escrow funding options.   (20:00)

Fiverr – On-demand freelance service offering graphics and design, video, digital marketing and more.  Quick, simple process, projects starting at $5.  Can do add-ons to get projects completed more quickly. (23:50)

Upwork – A byproduct of Elance and oDesk merging together. Large, global online workplace for businesses and professional freelancers. Community offers skills and services for a wide variety of short and longer-term projects, ranging from blogging to web design to more complex development work. Helps with taxes, offers escrow funding of projects, has robust communication platforms.  Takes time to understand and learn how to leverage effectively.  (24:40)

Amazon Mechanical Turk (MTurk) – Amazon operates a marketplace for work that requires human intelligence. Developers can leverage the service to build human intelligence directly into their applications. This is not necessarily a recommendation from Ryan and Steve but they suggest having awareness of the platform as it will become critically important in the future. (27:35)