Imagine that you have two large apple trees in your back yard.  Every spring, the trees require pruning, so you purchase a set of good pruning shears and a sturdy ladder.  You read a couple of gardening books and since pruning is not an exact science, stand back and survey the tree for a few minutes before starting to lop off branches.  You are methodical because you want a good apple harvest next fall.

You consider every limb, every twig as you try to decide which ones should stay and which ones should go.  After finishing the first large limb, you estimate that the entire job is going to take much longer than you expected - three or four hours at least.  Pruning has proven to be a much more demanding task than you had anticipated, and is taking precious time away from the core of your business.

At that moment, a local orchard worker drops by with a leaflet offering his pruning services.  He offers to prune both trees for $25 – you spot a ripe opportunity and you hire him on the spot.  Relieved of this task, you head back into the office to finish working on an important presentation you will be making to a new client tomorrow.  Finally, you can get back to your real work.

After finalizing the details of your presentation and perfecting your delivery, you check in on the orchard worker’s progress.  Your trees are beautifully pruned and the limbs are stacked in a neat pile.  You have just learned the advantage of outsourcing.   

Outsourcing can be a win-win situation for many companies.  Just ask Fortune 50 companies like Boeing, Johnson and Johnson, and Bank of America, all of whom have readily embraced the benefits offered by outsourcing.  Pati Robinson, Director of Benefit Operations for Boeing, cites Boeing’s outsourced human resources functions as a key strategy for keeping up with the latest technological innovations, transitioning to a single-source provider to increase efficiency, and lowering the company’s transaction costs. 

Johnson & Johnson (J&J) took a similar approach when the company tried to revamp its human resource processes.  Initially J&J elected to repackage and insource the HR function.  However, the more the company explored the concept, the more management realized that the company would need to hire extensive, trained personnel to handle the work, as well as replace its technology in order to keep pace with the market. 

The cost and resources required to successfully handle the company’s human resources needs far exceeded initial expectations.  The results?  J&J’s turned to outsourcing - securing a partnership with a specialized human resources firm that helped them meet intensive HR demands, thereby allowing J&J to refocus their energy and resources on the company’s core business.

The outsourcing of non-core business functions has become not just a smart business move, but a critical strategy for maintaining a competitive edge and increasing market share and shareholder value for companies of all sizes.  Small-to-mid sized businesses, which are already operating under the strain of limited resources, stand to benefit greatly from outsourcing arrangements. 

Outsourcing can provide companies with considerable cost and timing savings in such areas as:

•  Payroll processing
•  Regulation and new hire compliance
•  Labor law consultation
•  Employee relations support
•  Worker’s compensation administration
•  Unemployment administration
•  Staffing assistance and assessment
•  Benefits administration
•  Tax processing and filing

•  Minimizes business focus on non-core company functions
•  Increases business efficiency through an improved focus on profit-generating activities
•  Frees up internal resources
•  Increases ability to keep pace with changing market trends
•  Access to highly-trained professionals with expertise in functions outside of your core competencies
•  Provides a single point of contact – saving you time and energy and increasing efficiency
•  Access to the same economies of scale, efficiency, and expertise that large companies enjoy