Dominic RovanoDominic Rovano

The current competitive labor market, coupled with the highest inflation rate we’ve seen in decades and the subsequent and inevitable rise in salaries, has placed unique pressures on employers to recruit and retain quality talent while attempting to keep costs low.

Inflation rates soared to 8.6 percent in May, the highest our country has seen since December 1981, while the labor shortage continues to challenge employers across all sectors. There are currently 5.5 million more jobs available than there are workers to fill them. For marketing, PR and advertising agencies, your largest cost consists of wages paid to employees. Most firms have a long list of job openings and continue to struggle to fill them timely. How do you fill this gap? If you haven’t already taken a close look at your internal processes, it’s time to evaluate and analyze your operations for the long-term health of your business—and it may be time to consider outsourcing some functions.

The emergence and reliability of cloud-based technology and shifting workplace models have opened the door to outsourcing tasks to specialty firms and remote contractors. Many agencies have traditionally relied on administrative personnel to perform several internal business tasks, including payroll, recruiting, scheduling, billing and even marketing. This model may not be the most efficient, productive or sustainable for the long-term growth of your agency in the current economic climate.

As all agencies aren’t the same, many outsourcing firms will tailor their services to fit your unique needs. The right outsourcing services will complement your internal capabilities and support your core business function. Outsourcing can relieve burdens, reduce overhead costs and increase productivity, among other benefits. Let’s dive into six reasons why outsourcing may be the right path for your business.

Why outsource?

Many marketing, PR and advertising agencies are lean, tight-knit and focused on drumming up new business or developing innovative creative projects rather than perfecting internal business processes. This creates space to outsource certain roles you would typically find in larger operations. Outsourcing presents several benefits, including:

Talent: With the current labor challenges, it can be difficult to find experienced employees satisfied with performing more manual or highly repetitive tasks. Working with an outsourcing firm or organization can eliminate time spent recruiting and onboarding from within the limited talent pool.

Training: Training can expend valuable time, energy and resources, especially if your organization is struggling with a high turnover rate. Instead of spending time onboarding and training an employee—who might choose to leave your organization for another opportunity—it can be easier to control the timing and outcome through outsourcing.

Cost: With remote work accessibility increasing, some organizations choose to outsource to markets with a lower cost of living, either in the U.S. or overseas. The employer also doesn’t need to cover certain employee expenses when outsourcing, including health and dental insurance, 401(k) contributions and equipment for the employee.

Expertise: When you outsource to a specific firm, they’re typically trained for precisely the role you need. They’re experts in their fields, whether that be IT or accounting. You don't need to spend extra time and resources training employees on new processes; you're getting some of the best and most efficient talent available.

Agility and flexibility: In a constantly evolving market, it’s important to respond to changes and updates quickly and intelligently. If your staff is bogged down with completing menial tasks, it can be difficult for them to produce quality and strategic work. Many choose to outsource because it allows for more agility and flexibility. Outsourcing frees up your internal team so they can focus on producing quality work.

Access to sophisticated tools and processes: When outsourcing, you're paying for the technologically advanced tools, processes, workflows and RPAs the outsourcing company has invested in, in addition to labor. If a company only outsources video recording and editing, you can assume they have access to the finest equipment and software. If you have hired a firm to research a new target market you are looking to expand into, you can assume they’re utilizing quality data collection tools.

Areas to consider outsourcing

It’s not uncommon for people to wear multiple hats and be responsible for various administrative areas. However, this model can be challenging to sustain as your business grows. If your agency is of a smaller size and you don't have the resources to hire individuals dedicated to these roles internally, consider outsourcing the following functions:

  • HR and payroll: There are many companies that can provide outsourced HR and payroll services. These organizations can provide several aspects of the HR function, including benefits administration, recruitment, employee support, payroll and employee data management.
  • IT: IT is another important function, especially with rising security threats and data breaches. Many agencies choose to outsource IT to manage data and security, software and internal technology support.
  • Client administration: Agencies can benefit from outsourcing to a client administration company to manage client-facing tasks including managing contracts, agreements, required documentation, scheduling and even the proposal process.
  • Accounting: By outsourcing the accounting and finance function, you can receive day-to-day transactional support including bill pay and invoicing, accounting assistance with complex GAAP matters, financial advice on contracts and agreements, forecasting, budgeting, KPI analysis and more.

Steps to implementing an outsourcing process

To maximize the potential of your outsourcing operation, it’s important to first develop a plan. Here are a few elements to consider before implementing an outsourcing procedure:

  • Hold a strategy session with key stakeholders and leaders within your organization to identify areas for outsourcing. Understand the risks and benefits of outsourcing from multiple perspectives before beginning your process.
  • Develop a written plan with benchmarks and a timeline that factors in the time to hire a firm and evaluate after initiation.
  • Identify key companies that align with your values and can assist with the tasks you need. After you’ve selected possible partners, be sure to thoroughly interview them before making a decision.
  • Initiate and re-evaluate the outsourcing process. Try to follow your written plan as closely as possible.

Outsourcing could be a smart consideration for your business model. Before you choose to outsource, be sure to understand fully the associated costs, top priorities and expected outcomes from both ends. Whether used as a stopgap measure for lack of talent or a way to reduce costs over time, outsourcing can be useful—if implemented and utilized strategically.


Dominic Rovano, CPA is a partner at Janover LLC and leads the firm’s Professional Services Group.