Sales & HR Outsourcing Trends in India

Sandeep Mathur, Managing Director, LyncBizCorporationSince the time outsourcing has emerged, it has delivered numerous benefits to all sizes of companies globally. India has emerged as one of the prominent markets for outsourcing. It has even generated a new industry of companies to provide all the required talent.

Deloitte’s 2016 Global Outsourcing Survey talks about cost, enabling core business functions, and solving capacity issues as the primary drivers to outsource. The traditional areas of outsourcing have been in legal, tax, real estate, manufacturing and information technology but now a vast majority of companies are looking at functions like HR, sales and marketing to outsource as well. The same survey talks about an increase of more than 32 percent by companies in HR outsourcing.

Outsourcing the HR function to an expert gives more time to the owner-manager to focus on the core business and other strategies. Start-ups also gain from these experts as they have multiple industry exposure and can bring in best practices and customise it according to the needs of the company. There are mandatory compliance processes in HR which, if not setup at an early stage can create significant challenges going forward. Outsourcing allows companies to benefit from expertise of people who have experience in the field and therefore for a fraction of the cost of hiring someone dedicatedly, they could benefit from the same. Hiring is one thing but retaining top talent remains an issue for most companies, even some of the larger ones, having clear processes from the onset with external outsourced help can ensure setting up processes which, reward top performers and creates incentive for them ton continue contributing to the company.

90 percent start-ups who are engaged with building products for Enterprises,large and small fail in the first two years. While there are several reasons attributed to start-ups failing, over 75 percent fall into the category of Sales and Marketing. Most entrepreneurs,
if they are smart would adopt a lean methodology to build their product based on what customers need, while that is a great start however it does not guarantee success, infact most often on receiving the initial funding, scaling the business becomes the a chilles’ heel. CAC/LTV ratio (Customer Acquisition cost to Lifetime value), Market segmentation, monetization models, replicating customer success etc. are concepts that most entrepreneurs have not dealt with since most of them come from being a product manager or a great coder/ developer. This is where outsourcing the Sales & Marketing function can increase the miserable odds that already stacked against the startup.

Outsourcing the HR function to an expert gives more time to the owner-manager to focus on the core business and other strategies

You might have the best product and there is great suitability i.e. solves a compelling pain. However, B2B selling requires an understanding of not only the challenges faced by companies but also their buying patterns, budget allocations, decision-making & hierarchy, right people to connect with in those companies and most importantly negotiating and ordering processes.

Outsourcing allows the startup to control its burn while gaining vital access to the marketplace and . reducing the time to market. All of this without compromising on the focus to build the product and company.

A question that entrepreneurs often struggle with is “what is the right time to outsource”, my view is that Outsourcing needs to be a core part of your strategy, therefore whether you are a startup looking to scale or a successful company moving to another orbit or looking to open a new market, its always a good idea to identify the core strengths of the founding team and outsource all the rest.

Once you had identified outsourcing as a source of strategic competitive advantage, its extremely important to then identify suitable partners in this journey. The outsourcing companies one should be partnering with should be companies who are going to truly be your partners. The questions to be asked during the identification stage are:

- Has the outsourcer demonstrable expertise in the areas you are looking to outsource
- Can the outsourcer provide you dynamic pricing; based on your business requirements
- Is the outsourcer looking to grow with you and partner for a longer term, simply put are you going to be an important customer for them
- Do you have a clear set of deliverables from the outsourcer on what they will provide you and how much effort you would need to put in with them. Not having clear expectations/ deliverables sometimes creates issues in the future
- Is the outsourcer open to do a small controlled pilot for a couple of months to see how the two organizations work together
HR &Sales outsourcing isn’t even optional anymore.It’s required if you want to win.