An agency refers to a business or a firm that provides a particular service for another company, a person, or other entities.
Agencies can be classified in the public or private sector. Government agencies like FDA, DOT, and ATF are included in the public sector. In comparison, examples of the private sector are travel agencies, advertising agencies, and employment agencies.
There are also employment agencies that are affiliated with the government. Thus, these employment agencies belong to the public sector.
How to differentiate an agency from an organization?
In most cases, an agency and an organization are often used interchangeably. In reality, these two entities have their differences.
An agency is different from an organization, particularly in the following areas:
Products and services
In terms of earning profits, both agencies and organizations differ in what they offer.
Organizations are commonly B2C firms. They primarily market and sell various products and services, and their target customers are consumers.
Agencies, on the other hand, are considered B2B. They mainly offer services to other businesses. One example is a marketing and advertising agency that provides its services to an e-commerce company.
Organizations earn payments directly from consumers, and this can be in cash, credit card, online payment, or checks in the course of the transaction.
Agencies usually collect payments from their clients after they have finished a certain project, or on a contractual agreement. They also commonly propose bids to different organizations and businesses to secure projects.
Organizations are typically larger than agencies and are composed of hierarchical structures. They also involve several departments such as accounting, marketing, sales, human resources, and IT departments.
Agencies may also be a bigger size, but they all specialize in one area of expertise. Going back to our previous example about a marketing and advertising agency, it will not require several management levels.
In general, both organizations and agencies may operate as profit and non-profit entities. Further, their main differences are in structure, size, and payment methods.
Why should an agency outsource?
Although agencies typically function in a particular area of specialization, outsourcing can be of great advantage, especially in terms of growth and development.
A lot of agencies over the years have fully embraced this strategic practice as they can take full advantage of the following:
Instead of hiring in-house staff, agencies can save big chunks of their budget through outsourcing. This has also been very helpful for agencies with smaller teams or are just starting up in their respective industries.
With outsourcing, agencies will only be required to pay a fixed price, whether an hourly rate or per project. In hiring in-house employees, agencies will also need to invest in training, other resources, additional office space, and other benefits apart from wages.
Focus on core competencies
Outsourcing allows leaders to focus on what matters most, particularly their core competencies. They can hand over their non-core tasks to their outsourced staff while they work on how they will further grow and strategize.
To help scale quickly
Agencies can scale quickly through outsourcing to entertain and cater to more clients. With outsourcing, an agency has the option of having one or two outsourced staff or an entire team.
What services can an agency easily outsource?
Outsourcing can be leveraged by all types of industries, company sizes, and business entities. Below, we have examples of services that different types of agencies can farm out to an outsourcing provider:
An agency that doesn’t specialize in marketing can significantly benefit from outsourcing marketing functions. After all, even agencies need to have a solid digital presence to help with promoting their services, widening their reach, and attracting more clients.
Outsourcing providers have marketing experts with excellent skills and proven experience from working for companies in different sectors.
Accounting and finance
Accounting and finance are critical parts of every agency. Outsourcing accounting professionals help agencies track and monitor their financial health while saving on costs.
On top of that, they are also able to secure their tax responsibilities, and adhere to compliance standards on bookkeeping accurately.
One of the standard services that agencies usually contract out to an outsourcing provider is administrative tasks. Admin tasks are non-core, repetitive tasks like scheduling emails, organizing calendars, or answering phone calls.
Outsourcing creatives may involve graphics artists or content writers. In many cases, agencies that do not offer creative services do not have staff with these types of expertise.
Especially in today’s online era, agencies need to create and maintain their websites and social media profiles. And this is where outsourcing creatives comes in handy.
Just like Accounting and Finance, Human Resources is another essential part of an agency. In outsourcing HR, agencies can contract out certain parts or their entire HR department. Examples of HR outsourcing roles include payroll, recruitment, career development, and the like.
Overall, what we have listed above are just a few examples of the services that an agency can acquire from outsourcing providers.
For agencies looking to outsource, check out our BPO Directory page to help you find the right provider to handle your outsourcing needs!