7 Game-Changing IT Outsourcing Benefits for Small Businesses

Colm O'Rourke

November 10, 2023

An illustration of a team of developers hired via IT outsourcing.

Looking for a professional developer with a unique skill set to build a custom app for your business? Do you have a prize-winning idea that could scale your business but lack the necessary team to make it happen? Why waste time and resources on hiring an in-house team of developers when you can outsource? IT outsourcing is a billion-dollar industry that over 70% of companies are turning to in their time of need. And to answer your next question – yes, it gives results! But just in case you might have doubts, here’s an article that will introduce essential IT outsourcing benefits for your business. 

Why do Small Businesses Need IT Outsourcing in 2023?

IT outsourcing has become a well-established business strategy that offers a cost-effective way to access skills necessary for scaling your business. With companies in all industries implementing custom software solutions to get ahead of competitors, having the best software developers for the job is crucial for:

  • Lowering operational costs;
  • Attracting new customers;
  • Retaining current customers;
  • Staying ahead of competitors;
  • Boosting brand awareness.

Outsourcing outweighs the costs of hiring full-time

While there has been a global downsizing by technology firms of all sizes in terms of headcount, this has not had a significant impact on the number of software developers available on the market. Many of the types of roles that tech companies of all sizes have been reducing are in areas such as recruitment, customer services, sales, account management and customer success. These functions tend to be back office and support rather than front-line engineering roles. 

Obviously, if your company is not going to be hiring as much as it had been, then there is less of a need for recruiters and associated functions. Tech companies, however, still need to maintain their engineering support functions such as: 

  • Project Managers, 
  • Scrum Masters, 
  • Software Testers, etc.

This has meant that the global shortage of these professionals has shown no sign of abating. 

What are the Key IT Outsourcing Benefits for Small Businesses?

Many small businesses are now turning to the option of outsourcing their IT support and maintenance needs and here are seven game-changing benefits for doing so:

#1: Reduced cost of hiring

As a founder or CTO of a small business, you need to spend your time wisely and focus on developing your product. Segmenting and defining your market, working on your sales and execution strategy, and managing the operational aspects of the business. With so many everyday tasks, it’s challenging to find the time to research, interview, and hire developers.

By outsourcing your development needs to a reliable professional partner, you will remove all of the hiring cost headaches. This includes the costs of advertising your roles or using a specialist recruitment agency as well as the associated costs of:

  • Posting job ads;
  • Reviewing CVs;
  • Arranging and attending interviews;
  • Negotiating over job offers and salaries;

And all that before finally getting the developer to join and to start.

#2: Access to exceptional talent

By partnering with a well-established professional outsourcing partner, you will gain immediate access to skilled tech talent as well as their hiring and sourcing experience and know-how. It’s now your partner’s job to fill your roles with talented staff and it is incumbent upon them to fill the roles with experienced professionals who will fit in well with your team.

#3: Scaling your team in record time

A reliable outsourced partner will give you great guidance on how quickly they can scale up a team for you. Typically, you are looking at 2 weeks from CV submission to the team starting on your project. 

Trying to hire yourself locally will take around 12 weeks from CV submission to the individual starting work for you. This is factoring in the time it takes to advertise, source, interview, offer and then the notice period the developer has to give their current employers.

#4: Balanced budget

A good outsourcing partner will have significant cost savings on hiring locally. Typically, you can expect around a 30% discount on hiring locally. By using an outsourcing partner, you will also only pay for effective working days. 

There is no payment required for annual leave, sick days or public holidays. You also save on local employment taxes and associated costs of having team members based locally, office rent, equipment etc. You might also consider the costs of keeping an in-house team vs. the costs of having a part-time team jump in and take care of quality control, testing the product, wrapping up the project, etc.

#5: Minimal retention struggles

One of the biggest channels for small businesses is the retention of development staff in the local market. The loss of knowledge when a developer leaves the project as well as the downtime on trying to replace them is hugely expensive and detrimental to the success of a project. Why should you go through all that trouble when there is an easier and more reliable option available to you?

By utilising the services of an outsourced web development company, the responsibility for the retention of staff for your project moves to the third-party company you outsource your project to. It is then up to them to ensure that your team is fully staffed as required at all times. The partner will also ensure that all necessary technical documentation is in order so that should anyone leave the project they can be replaced seamlessly.

#6: Short term skills

A huge IT outsourcing benefit for small businesses in partnering with a tech recruitment agency is the opportunity to plug short-term skills gaps expeditiously. Should you require some QA testing, Project Management or DevOps expertise for a couple of weeks to finish a project, to fill a skills gap or to cover holiday leave, your outsourced partner will be in a position to do this for you. 

As they will know and understand your company and your project, they will fill your short-term requirement with suitably qualified staff who can be trained on your project by their colleagues.

#7: More time to focus on your core business

Outsourcing all your IT and development requirements to a trusted partner frees up your time to do what you are good at and what is most beneficial to your company and to your business growth. 

By building a great trusted relationship with your development partner, you know that that side of the business is now covered. You no longer have barriers to growing your business. Should you win new business or new customers that require customisations of your product, you can safely take on new projects knowing that your partner will be responsible for all of the IT staffing and delivery of this work.

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Outsourcing is the Most Logical Course of Action for Small Businesses

Team of people sitting and going through CVs and discussing IT outsourcing benefits.

As many businesses are facing the challenge of sourcing, hiring and retaining software developers to work on projects, cost-effective solutions are an increasing concern. As small businesses cannot compete with larger competitors, oftentimes the lack of talent available to them is one of the largest barriers to being able to grow and scale their brand. 

Many of these companies are product companies rather than IT companies, yet they seem to spend an inordinate amount of time trying to fill the skills gaps in their business as well as retaining their staff. This struggle often detriments the development of their product as a consequence. 

The question that arises: is it truly the most effective use of a founder, CEO or CTO’s time to be spending most of their week on sourcing, interviewing, and hiring developers? The answer – no.

The solution – turn to reputable IT staffing and recruitment companies such as Capaciteam and take advantage of all the IT outsourcing benefits that we covered in this article.