Outsourcing has long been a remedy for the smaller company. While managers of small businesses often assume that outsourcing is something that only multinational companies can do, it often provides the solution for those companies who don’t have the funds or the staff to do everything in-house.

Almost all companies outsource; many without even realising it. It has been commonplace and accepted for companies to outsource functions such as their accounts, cleaning and payroll to name but a few, but many fail to acknowledge that this is in fact outsourcing and are hesitant to look at the other options that outsourcing can offer. One major worry for firms is outsourcing a process and completely losing control.

All sorts of things are suitable for small business outsourcing. One of the most popular things to outsource (and often offshore) is IT. This can be a godsend to a small company that can’t accommodate in-house staff full time to manage their IT systems but need a reliable and affordable service. With such a dependence on IT today it is paramount to have a steadfast service. Offshore services have proven popular either in IT support or software development and India has shown itself to be a hotspot for this kind of work.

The real answer to this question is that all sorts of processes can be outsourced from legal work to HR, as long as the internal controls are in place to manage the processes. Sending out HR, possibly overseas, could be a disastrous error as it is outsourcing something that will directly impact staff. However, if the internal management of this process is up to scratch, the impact on the staff will be non-existent and the costs saved and expertise gained will be maximised.

Keys to staying in control of the outsourcing deal are:

Selecting a supplier
When selecting a company to work with, there are obvious features to look for such as sector specific experience, a good track record, a good cost proposal and a reliable infrastructure but one of the most important issues is cultural fit. If the two companies don’t gel there is little likelihood the partnership will last. Similar working ethics, visions and expectations will ensure that the outsourcing relationship runs far more smoothly and that the outsourced provider will be easier to manage.

Nailing the contract details
As tempting as it may be, the first rule of thumb is not to nail your supplier to the floor over service level agreements (SLA) and cost. Many suppliers, keen to win business, will overstretch themselves on contract promises. Realism is the key. Really being meticulous with the contract details is essential. There are so many different eventualities that are possible; it is paramount to be prepared for any eventuality. This really minimises risk within an outsourcing project and dramatically increases the chance of the project being a success.

Watertight HR and communication
What organisations must realise is that HR and communications need to be involved from the outset. Outsourcing is a decision that primarily affects the people within the organisation, no matter how small that organisation is. If rumours of a potential outsourcing project leak out, staff often automatically assume the worst: job losses. The decision to outsource must be communicated effectively to the whole organisation, with potential implications made crystal clear.

Working together
The end user must have his or her finger on the pulse of the process. This will ensure that at least a degree of knowledge is retained in-house.

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There was a time when outsourcing meant the wholesale sub-contracting of departments, traditionally accounts, call centres and more recently IT. No more. Over the past few years, there has been a radical change in the opportunity to outsource: the latest of these are the new marketplaces that provide busy business owners/managers the opportunity to outsource everything from marketing and business plans to secretarial and accounting resources.

And, unlike the more traditional sources where you have to go out and hunt down the best service providers – waste time, pay fees, get hassled by agents and so on – these new conduits have turned the whole process on its head. They let you advertise your requirements on their site, usually free, and the skills come to you.

The way it works is they have thousands of skilled freelancers registered on their sites, all looking for opportunities to work on your projects. Once you post a project, the ones with matching skill-sets will be notified so they can place a bid (or quote) for the work. You can then review these bids at your leisure, pick the one that suits you best, and get on with your other priorities.

But how do I stay in control, you ask. How do I protect myself from paying for work that is not up to standard?

The best of these freelance marketplace sites provide payment protection schemes, whereby the money is put into Escrow until the job is finished and until it is 100% approved by the contractor. This works as protection for the freelancer as well, as they know a deposit has been made, and know that the contractor is serious about the work.

This approach minimises risk, dramatically saves time and hassle and, above all, enables hard pressed entrepreneurs to get on with the tasks that generate business, rather than the aggravating but necessary “other things to do”.

So think of a project you need doing, and the chances are, you can outsource it and thus cost-effectively get far more done with your stretched resources.

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Whether you need to increase efficiencies, reduce costs or utilise outside expertise in the often headache-inducing areas of legislation or changing technology, outsourcing processes can help to lift some of the burden without losing control or reducing clarity in your business.

When it comes to outsourcing for small businesses, key to success is simplicity, reliability and value for money. Small businesses are unlikely to have the in-house resources required to be confident in meeting the complicated and changing legislative requirements expected of them. One particular minefield is payroll. Running the payroll manually can take up valuable time and all too easily lead to mistakes, potentially resulting in hefty penalties and negative impacts on staff morale.

Payroll outsourcing is becoming increasingly popular among small businesses as a cost-effective way to reduce associated burdens, including tax calculation, national insurance contributions, adding new employees, payslip production and end of year filing. When considering an outsourced payroll service that allows you to maintain control, there are a number of things to look for:

Web-based technology: web-based solutions are quick to deploy and interfaces are usually based on familiar standards meaning that training requirements are minimal. By using a web-based solution you can also be sure of having access to the most up to date information and, of course, you can access the system anywhere, at any time.

Accuracy: it is imperative that your outsourced service is reliable and accurate. Ensure that you check supplier credentials and that they can consistently show increased customer efficiencies when payroll has been outsourced.

Flexibility: small businesses should look for a solution that will be able to cope with their changing needs. How likely is it that your needs will change in the short term? Is it likely that new recruits will join you? If so, you need to ask questions about scalability of the service so that your outsourced service will grow and adapt with your business needs.

Service: payroll services should be backed up by service support from qualified, experienced and knowledgeable staff, capable of answering any questions that may arise. Know your business and its needs. Pose scenario questions to the support team to get peace of mind that they’ll be able to support you if the time comes. There are differing measures and standards to show security levels. For example, suppliers operating to the Government Secure Extranet (GSE) guidelines, operate to the highest security standards demanded to deliver services to the government’s authorities, so it is a strong case in point that the supplier meets rigorous security levels.

In summary, look for a service that meets all these requirements in the small business market. For example, MidlandHR’s web-based payroll system has been developed by a team that have worked on the payroll systems of major public and private organisations in the UK who insist on the highest levels of accuracy and reliability. With a history of providing HR and payroll solutions for companies of all sizes, MidlandHR is always able to provide a payroll outsourcing solution for your company as it grows. Finally, it has a team of qualified and experienced payroll experts available to answer any questions that aren’t immediately answered by the online system.

When starting a new business or trying to manage a growing small business, there are many potential pitfalls. Attention and time needs to be focused on your core business activities. Payroll outsourcing offers the opportunity to avoid a mass of legislative complexities at relatively low cost. By choosing your payroll provider carefully, you will also be able to maintain close control and see that the service meets your requirements throughout your business’ development.

For more information, please visit www.midlandhr.co.uk