What exactly is outsourcing?

Outsourcing is the practice of using a third party contractor to carry out a certain business function rather than carrying out that function in-house. Many companies have been outsourcing their business functions for years rather than hiring their own employees. This happens for a multitude of reasons.

Why is the practice of outsourcing so prevalent in the business world?

For many, outsourcing has been used as a cost-cutting measure and has been applied across a wide variety of different functions; from HR and payroll to accounting, with many different functions in between. By outsourcing these functions, businesses can save on their overheads, including the following:

• Rent costs; as they may be able to maintain a smaller office
• Office furniture and IT equipment; fewer employees = fewer desks
• Vehicle costs; some roles involve the need for the employee to have a car, outsourcing your services means that you do not need a company vehicle, or the costs associated with having one
• Labour related fees; employers in the UAE are required to have a residence visa, as well as health insurance. Full-time employees are also entitled to end of service gratuity payments, which are rarely taken into consideration at the hiring stage, but can often catch companies out when that employee leaves the business
• Training and development; employees require training and development to ensure they are able to successfully fulfil their roles, and further development training to grow with the company. This can be expensive, both in terms of time and money, and often reduces the efficiency of a team whilst a new team member is being trained.

However, the advantages of outsourcing go beyond simply cost reduction. Other key advantages of outsourcing include:

• Increased efficiency; certain functions can be outsourced to specialists in their field, allowing tasks to be carried out more quickly and efficiently, compared to undertaking them in-house
• Improved focus; by outsourcing certain tasks, a company can focus on its core activities, without allowing additional tasks to interfere with their goals and priorities
• Flexibility; certain business functions may only be required from time to time, such as visa applications/cancellations. Rather than hiring a fulltime PRO to process the paperwork, this could be outsourced to a specialist company on an ad hoc or retainer basis.

Many companies can benefit from outsourcing certain functions of their business to a third party specialist. Small/startup businesses can gain access to expertise that might otherwise be unaffordable. Large companies can look at outsourcing as a way to reduce their overheads whilst streamlining their services and workflow. In the GCC in particular, it can save costs related to visas, insurance and end of service gratuity.

Links Group has over 15 years’ experience in the region and is able to provide you with a number of solutions to suit your business needs. We pride ourselves on being a secure and reliable provider and we are always available to guide and support you along your journey.

Should you be interested in learning more about any of our outsourced services, such as PRO assistance for visas, HR consultancy, Payroll, Trade License assistance, etc. please get in touch with us on consultants@linksgroup.com or +971 (0) 4 446 3900.