Home Features SMEs should outsource their way out of the recession
SMEs should outsource their way out of the recession
Written by Saif Bonar, UK Manager, Freelancer.co.uk   
Tuesday, 15 November 2011 16:23

British businesses, particularly SMEs need to look beyond the headlines.


With a report from Equifax recently revealing that 120 businesses are going bust in the UK every day, it is truly a difficult time for British SMEs. It is clear that despite hundreds of billions of pounds worth of quantitative easing, banks are simply not lending to the small businesses that need it the most. The media is once again filled with reports of recession, financial meltdown and the general negativity surrounding the British economy.

I have said this in the past, and I believe it now more than ever – British businesses, particularly SMEs need to look beyond the headlines, rise above the negativity and look for positive ways to tighten their belt and continue building their enterprise.

The SME economy in the UK may be contracting, but it is still worth well over £1,000 billion annually. Despite this purchasing power and relatively enormous wealth of the SME sector, too many businesses are still finding it difficult to survive. While many seek cost-saving alternatives, rising fuel costs and the subsequent impact make it complicated to identify where these savings are can realistically be made.

The simple answer is – labour.


There are almost three million unemployed people in the UK alone. The world is undergoing a fundamental correction in labour prices, the internet has smashed down global barriers and opened up the silos of information workers, flattening labour markets and leading to a surge in the supply of skilled talent. If British SMEs want to survive and eventually thrive, they must consider tapping into this deepening pool of resources to take advantage of the economic principles of supply and demand, ultimately securing the staff that they need at a price that's right.

Hiring a highly skilled, highly motivated, flexible global workforce will deliver significant savings to British SMEs and help those who are struggling get back in the black. Accountancy, administration, design, programming, engineering and so many other skilled professions have a surplus of talent. Many of these workers are currently unemployed, awaiting economic recovery and spending their time on outsourcing websites looking for work to tide them over.

They are, to borrow a phrase from my CEO "PHDs – Poor, Hungry and Driven". If a business is struggling, then it should look no further than this talent that is available just a few clicks away. In other words, cash-strapped businesses should refrain from spending thousands with big enterprises and design agencies and look for more competitive, project-based workers – this will save thousands of pounds and put the money straight into the hands of those that need it most.


With that in mind, here are a few tips for anyone considering outsourcing a project online:

1.    Take the time to write a clear and detailed project brief or job description. A poor brief will lead to ambiguity and problems further down the line

2.    Spend time reviewing applicants, make a short-list of favourites and enter into dialogue with them to find someone trustworthy that you can build rapport with. This is particularly important for long-term, or hourly based projects

3.    Be realistic about what you will spend. Online outsourcing is incredibly competitive. It is a buyers marker right now, so you will save plenty of money, but don't expect the world's best programmer to work for you for £1 an hour

4.    Setup milestone payments, and don't release any money until you have seen initial, mutually agreed deliverables. However, if your project is worth £10k and will take six months to deliver, don't expect a PHD to be able to sustain that without some interim payments

5.    Leave honest and fair feedback. If somebody has done a great job, then reward them for it by singing their praises through feedback and pay them a bonus if you can. Conversely, if they have promised the world and delivered nothing, report the problem within your feedback. After all, the outsourcing eco-system relies on honest feedback to help the next SME make the right choices.



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