Outsourcing. Just saying the word out loud raises questions and emotions. During several recent presentations, I have started talking about outsourcing as an option that agencies should consider. In fact, a few agencies have already started hiring staff from another country to work for them. That said, many agency owners and staff react negatively to the thought of outsourcing. They ask: “Why would we take a job and move it overseas? What would my clients think?” These are valid concerns.
While outsourcing is not a good option for every agency, I do believe it is something that agency owners should at least consider. Thinking about outsourcing strategically allows you to select functions or specific tasks that can be done less expensively — and often more accurately — by someone not located in your agency.
As an example, I recently received a phone call from a person at a small agency in South Carolina who asked if I knew of any resources they could utilize to hire remote staff. The agency owner explained that he was very frustrated with the problems he had encountered trying to hire staff locally. When he did hire someone, he spent a significant amount of time and resources training that individual. Inevitably, the person left the agency just when he or she was becoming productive. This particular agency had already outsourced all of its accounting functions to a US-based firm that specializes in insurance agency accounting. The agency owner was very happy with the arrangement and wanted to explore a similar arrangement for other positions in the agency.
Where to outsource
Specific transactions: Review transactions that are completed in the agency that don’t add value, such as issuing standard certificates of insurance, or as described above, accounting functions.
A staff person: There is a growing list of agencies that have hired people located in China or India to work full-time for the agency. These people access the agency systems using a remote connection. The cost advantage is significant.
A virtual assistant: A growing number of people are hiring assistants to complete time-consuming and labor-intensive tasks. A friend of mine, who is a CEO of a large publishing company in Nashville, requires his direct reports to hire a virtual assistant for personal or business tasks. He gives them a $500 budget. He told me that he requires this so his staff will gain practical experience in how outsourcing can work.
Simple data entry: I’m currently working with an agency that is changing to a new management system. They have determined they are not going to convert any data from the old system. To reduce the amount of keystrokes necessary to get data into the new system, we have come up with three strategies. First, we will do initial downloads from their carriers. Then we will use the import function on the new system to import large schedules. Finally, we will hire (i.e., outsource) data entry for any items that are left. This allows staff to concentrate on their strengths and not waste time on simple data entry.
Outsourcing raises many questions. How do you find someone? What about security? What tasks can be assigned? How do you monitor quality? Be sure to consider each of these questions before you even think about outsourcing.
In my experience, using outsourcing strategically in an agency can build your competitive advantage. What’s your opinion?
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