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What is co-sourcing and how does it help?

What is co-sourcing and how does it help

With companies looking for effective ways to cut expenses, a variety of cost-cutting strategies have popped up throughout the years. Co-sourcing is one of the ways to lessen expenses in the workplace—a business model that has taken a page out of outsourcing’s book.

Employers everywhere are keen to try a system that will reduce cost and maintain quality in work.

Defining co-sourcing in 2022

Co-sourcing is the activity of introducing external service providers to in-house departments. In this case, internal employees will be working with outsourced team members.

Outsourced employees may or may not be in the same office as in-house employees. The former can telecommunicate and work remotely alongside their teammates. These two units must work together and achieve the same goals.

a group of people having a meeting in the table
Defining co-sourcing in 2022

The difference between co-sourcing and outsourcing

One major difference between co-sourcing and outsourcing is the model in which they operate. The former exists in a hybrid-like work setup while the latter can be an all-in, all-out setup. To put it simply, one exercises internal-external employee teamwork more than the other.

Outsourcing itself has its advantages, but having an outsourced team working harmoniously with internal employees may reap greater benefits for a company.

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Business processes you can co-source

The list of activities below isn’t exhaustive, but it’s a good jump-off point for businesses new to the process. Co-sourcing is a major decision that will impact the company’s employees.

Any major business decision should be made transparently and for the benefit of the majority. If executed otherwise, it may create a negative work environment that affects employee morale.

Content creation

From content writing to commercial and film production, businesses can often find freelancers—or “outside” help—for any content. 

Businesses can start with an in-house team of creators along with a manager, then slowly add freelancers and independent contractors into the mix. This way, more content can be produced in a more sustainable and cost-effective way.

Human resources

Serving as the heart and soul of any company, the human resource department can benefit greatly from co-sourcing. Many recruitment process outsourcing (RPO) companies cater to selective outsourcing, including but not limited to:

  • Background checking
  • Candidate sourcing
  • Initial interview
  • End-to-end recruitment process

External service providers can step in and help with these activities while in-house employees focus on employee engagement and other internal affairs.

Back-office activities

Data entry and clerical work are just some of the jobs that back-office associates do on a daily basis. The back-office department is another great area to introduce selective outsourcing. Companies can save resources by eliminating redundancies in the workplace.

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By working with a hybrid of internal and external employees, businesses can maintain and hit their key performance indicators (KPIs) without shelling out more money.

Telemarketing

There is a lot involved in telemarketing. From lead generation to cold calling, telemarketers face their prospects day in and day out, and they have goals, quotas, and KPIs to meet.

So, why not introduce selective outsourcing to the telemarketing department? The more heads in the game, the more chances there are of getting clients and closing deals.

Business processes you can co-source
Business processes you can co-source

Advantages of co-sourcing

Co-sourcing serves as a stepping stone into hiring external service providers, allowing decision-makers to take a peek at what’s to come. Here are the benefits that co-sourcing offers companies.

More strength in numbers

Co-sourcing means more people but not more cost. That means you can get more out of your expanded team without having to spend extra on overhead expenses and worker benefits.

Further, time wasters at work would be negated, and internal staff will be inspired to put in the same amount of work like everyone else.

Lower cost

If a department has 50 internal employees who are paid $20 per hour, and the management introduced 50 co-sourced workers paid at $10 per hour, they essentially have a whole unit’s worth of people at half the price.

As mentioned, the company also wouldn’t have to worry about additional overhead costs such as utilities and space rental usually associated with expanding in-house teams.

Stricter quality assurance process

With internal employees knowing the best practices in place, outputs from outsourced employees may be subjected to a much stricter QA process. This will help the management set examples and expectations.

Team managers can put systems in place to filter out exemplary work from both internal and external employees.

Is co-sourcing beneficial to both vendor and client?

The practice of co-sourcing is indeed beneficial to both parties. As mentioned above, those advantages can be seen in companies that dabbled into the industry of outsourcing.

There are many ways in which it can be beneficial, and the only way to discover it is to try it out. Business process outsourcing (BPO) companies have the capacity to assist organizations looking for assistance especially in starting out.

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About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

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Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 350+ podcast episodes, and a comprehensive directory with 3,000+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.