Business Why a recession is the best time for outsourcing

Why a recession is the best time for outsourcing


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CEO of RevoTechThe world’s leading outsourcing and global employment consultancy.

An impending recession tends to wreak havoc on companies’ growth plans. During such times, leaders often need to take new precautions to ensure their businesses can survive and thrive despite the onset of recessionary conditions.

Did you know that with an outsourcing strategy you are better able to deal with the demands of a recession on your company?

Benefits of Outsourcing During a Recession

The benefits your business can expect from outsourcing during a recession include:

Enable Cost Savings

Despite what outsourcers may say, since a company is measured in terms of money earned and money saved, cost reduction is an important variable in the outsourcing decision. In times of recession, when your earnings are affected, your business cannot afford to spend money as it has always done. Outsourcing gives your company the opportunity to reduce costs.

Creating flexibility in resources

In many industries, manpower is often the largest cost item on the income statement. When it comes to cutting costs, CEOs often have to lay off staff to cut personnel costs. It is the most effective, but perhaps the least popular of all the strategies.

Outsourcing provides the flexibility to move resources up and down as long as the defined conditions are met. A company that already outsources at least some of its operations has the flexibility to reduce the number of support staff of the outsourcing partner. This has a favorable effect on costs, without having to lay off employees.

Reduce burnout and mistakes

Laying off staff also means that remaining employees, including executives, have to take on more and more responsibility. While this is a good short-term strategy, over time it can lead to burnout and mistakes can creep into the job. This increases costs and negates the original benefit of staff reduction. The ability to rely on an outsourcer’s talent pool can protect your business from these harmful side effects.

Offering more value for the dollar

During global recessions, a supplying geography’s currency has been found to have a tendency to depreciate against the dollar. This allows the outsourcer to receive more service per dollar spent. Note that this benefit is limited to offshored schemes.

Because you can

Virtual work, which took off during the forced isolation of the Covid-19 pandemic, has now become a regular part of working life. Working from home now has a respectability that it struggled to achieve before the pandemic, despite many organizations experimenting with it.

Transcription, graphic design, digital marketing, website development, accounting, software development and many other activities can be done by external partners as well as internal resources. If you’re considering outsourcing some of these services but can’t take the final step, a recession might be the best time to give it a try.

While outsourcing can be a beneficial business strategy in many situations, in times of recession it becomes a crucial one.

So, how does one outsource?

If you haven’t done it before, where do you start? It may seem like quite a task. The following steps can ease your worries and help you complete the task with confidence:

Identify your requirements

Many B2B contracts fail because the buyer is not clear about the requirements and expects the supplier to do magic. That will never happen. Clarity in your requirements is a good start, including defining a consensus within the company on strategy.

Define measurement criteria

The outsourcing business plan should include the measurement criteria for evaluating the success or failure of the initiative. Don’t leave it like a moving goal post. This also gives clarity to the prospective partner.

Find partners

Once there is internal clarity, you need to get qualified suppliers to get interested in your work and bid on it. Spread the word in the right circles, participate in outsourcing industry events, contact industry associations, do an RFP and search online or through a consultant. There are many ways.

If you ultimately have insufficient interest, this may mean that the conditions offered are not suitable for suppliers. In that case, you may have to go back to the drawing board.

Select a supplier

The first step is to shortlist a few based on their bids and submissions. Engaging a B2B supplier can be lengthy, detailed and costly. It is not feasible to do it for a large number of bidders. Therefore, the first step is to narrow the list down to the best pair.

The second step is a detailed evaluation, which should include discussions, meetings, site visits, reference checks and other requirements that define the purchasing company’s procurement process.

Sign the contract

The last step is the signing of the contract. After that, the project management and transition processes can start.


Outsourcing is a growing industry and accepted business practice designed to create value. Both large and small companies use outsourcing for various parts of their business. Economic conditions such as a recession often amplify the beneficial impact of outsourcing for outsourcing customers. Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?

Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.


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