How Outsourcing Saved Companies During the COVID-19 Pandemic


As early as March 2020, when the world was just starting its uphill battle against the COVID-19 pandemic, the International Monetary Fund (IMF) described the global economic situation as the “worst downturn since the Great Depression.” This statement came from the IMF Managing Director, Kristalina Georgieva. And their predictions weren’t far off. The job losses and the company closures in the United States alone climbed in staggering heights during the next few months.

According to a study conducted by Facebook as early as May 2020, 31 percent of the small businesses in the United States were deemed non-operational. But even if this was the case, there were still many businesses in the country that survived the hardships caused by the pandemic. They enacted different strategies that helped their business stay afloat. Some transitioned to online services, connecting and accepting orders through their websites, social media pages, and mobile apps. But there are other companies that tried a different strategy. And that is outsourcing.

Here’s how outsourcing saved many companies during the COVID-19 pandemic.

Ability to Focus on the Core of the Business

The pandemic led to alarming rates of job losses in just a few short months in 2020. According to the Congressional Research Service, the unemployment rate peaked at 14.8 percent in April 2020. This is the highest it’s been since the authorities started collecting data in 1948. The rate lowered in the next couple of months, though. By December 2020, the rate was down to 6.7 percent. However, even if the rate was significantly lowered, this rate is still a cause for alarm. As much as it pained the employers, they really had no choice but to let go of some of their employees. But it had definitely helped them keep their businesses afloat.

By outsourcing some of their services from other companies, the employers and their remaining employees are able to fully focus on the core of their business. They created more products and delivered more services to generate much-needed revenue. Thus, companies are able to dedicate all of their attention to the most important aspects of their work. They left the cleaning and sanitizing to a hired cleaning company. They left the accounting and bookkeeping to outsourced accountants.


businessman looking at tablet

Outsourcing is a much more cost-effective option than keeping in-house staff. It’s because outsourced staff members are paid by the hour rather than a steady monthly salary. Plus, companies only resort to outsourcing whenever they need someone to do, say, administrative duties. So they would only need to shell out money for outsourced labor from time to time.

Another huge plus is that companies don’t have to think about offering benefits and other compensations for outsourced workers. And they can expand to other countries, too. Through offshore outsourcing, they can acquire services from countries in parts of Asia, where labor is much cost-effective than with the United States.

Access to Up-to-Date Tech and the Best Talent

Again, because it’s much cheaper to outsource workers rather than keep in-house staff members, companies are more able to expand their reach to find the best workers for the services that they need. For example, companies might want to outsource information technology (IT) services. They can reach out to contractors living in tech hubs. Even if the companies are very far from places such as Silicon Valley, California and Austin, Texas, they can still acquire IT services from the best experts there.

Another benefit is that companies can have access to the most up-to-date software and hardware without having to purchase it themselves. The IT contractors can take care of the tools and equipment that they need to do their jobs.

Perfect for Remote Working Setup

Today, over 4.3 million U.S. workers are working from home. They make up 3.2 percent of the country’s workforce. Apart from that, about 16 percent of businesses in the private sector only hire and work with remote workers. This high number of companies working from is influenced by the COVID-19 pandemic and the need to practice social distancing

Outsourcing is perfect for remote working. This is one of the reasons why companies started doing it. As mentioned before, outsourcing labor from different parts of the country and the world is a way for companies to save more money and find the best talent.

Although the IMP Managing Director stated that the economic downturn caused by the pandemic has been the worst in decades, she also stated that we’re expecting a recovery in 2021. It wouldn’t be easy, of course. The path to recovery would still be an uphill battle. But with business strategies such as outsourcing, things will start to look up sooner than we might think.

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