Small businesses opting for quality over price in their outsourcing choices

Outsourcing, hr and recruitment business strategy concept. Internet and modern technology.

While one of the considerations businesses outsource at least some of their operations is pricing, a new study suggests it is the least of many businesses’ concerns in choosing who they outsource to.

According to the SavvySME B2B Jobs Report 2021, the majority of businesses prioritise quality, industry expertise and cultural fit over lowest quotes from service providers when outsourcing. In fact, the lowest quotes came in as a priority for only 7.58 per cent of businesses when outsourcing. On the other hand, quality is cited as the primary consideration, with 34.87 per cent of businesses ranking this at the top.

This sentiment is backed up by the recent PWC Global Outsourcing Report, which observed that “Outsourcing is growing fast and delivering results. More people than ever are outsourcing with no indication that growth will slow. Our findings confirm that outsourcing has matured beyond cost reduction to become a way for organisations to better access talent and capabilities, gain more flexibility, reinvent their business model and drive innovation.”

Keith Rowley, SavvySME’s “Top Influencer in Online Business” shared why cost is not the right measure when outsourcing in business, saying, “Never think in terms of cheap or expensive. Think in terms of investment and return. Cheap with no return is very, very expensive. High cost with good return is cheap. This is really all a question of measuring value.”

Industry expertise came in as the second-highest priority, as chosen by 27.35 per cent of the businesses surveyed. Amanda Hoffman, SavvySME’s “Top Influencer in Tax” commented, “Industry-specific expertise might weigh in as more valuable than being besties with the accountant… I know of clients who have saved over $20k simply by getting the correct advice/consultation.”

Interestingly, cultural fit was considered the third most important factor for buyers at 19.44 per cent. On this matter, Erik Bigalk, SavvySME’s “Top Influencer in Marketing” cited his own experience, saying, “Looking back over the many clients we have worked with and run campaigns for, the ones that have really been outstanding have been where we have been more than just client and agency, but deeply engaged in the success of the business, passionate and full of ideas because of it…Yes, picking an agency that has kicked some goals, perhaps won some industry awards and has a strong list of past and current clients is a good basis. But, most certainly, if there is no passion, care, deep understanding and alignment that will have them go the extra distance, then the outcomes will certainly be stunted.”