The Benefits of Outsourcing
17 September 2021
17 September 2021
Regulatory requirements are constantly changing as more regulations are coming into force. Consequently, the management of risk and compliance is becoming increasingly complicated, and thus, the idea of outsourcing is becoming more and more appealing as this allows companies to focus on their core business.
When a firm chooses outsourcing, the firm would have access to a whole team of professionals. The firm would have the advantage of knowing that external expertise is immediately available should it be required. The outsourcing company would also be able to advise the firm on any improvements as through its exposure to other clients it would be able to determine what works best. Furthermore, the third party might also have access to skills which the firm might need in the future.
Due to the increased focus on areas such as compliance, it can be difficult for companies to fill in internal posts in a timely manner and find staff with specialized knowledge right away. This shortage in skills such as compliance and risk management can also be observed locally. Thus, bringing in external help can be a solution. Outsourcing can also help companies fill in posts temporarily and therefore allows the firm to continue operating smoothly until it can catch up internally.
Outsourcing can also help firms save money. Nowadays companies must continuously invest in new technologies to be able to cater for evolving regulatory requirements. Outsourcing can provide firms with access to sophisticated systems, such as name screening programs. This would allow firms to have access to the best available programs without spending large amounts of money. Outsourcing firms can also achieve economies of scale due to providing the same service to multiple clients, therefore they can offer firms lower rates.
Firms also spend a lot of money on recruitment and training employees. Outsourcing can lower the firm’s costs associated with hiring new employees. For example, by outsourcing the firm would not have to pay for healthcare and other benefits offered to its employees. As the number of employees increases, the firm would also need more office space. Therefore, it can be cheaper for firms to outsource certain operations rather than investing in more office space.
Outsourcing also offers staff flexibility. The firm can choose to bring in external help during higher demand periods. Another advantage is a higher level of continuity. The firm can continue operating smoothly even when key personnel are on leave. Staff turnover at the wrong time can also disrupt the operations of the firm, thus leading to uncertainty and more costs.
Outsourcing can also help the firm adapt faster to any changes in regulation, since it would be the third party’s responsibility to keep up with any changes and therefore inform the company accordingly. Furthermore, a competent outsourcing company would be able to carry out the task better than internal staff who are not as knowledgeable in that area.
When a company chooses outsourcing, the company will remain legally responsible for making sure it complies with all applicable laws and regulations. Therefore, it is very important to ensure that the outsourcing company has sufficient experience and knowledge required to carry out the services it offers.
If you require outsourcing services you are welcome to contact our specialists at Radix by email on [email protected]