12 October 2020

3 reasons why outsourcing could save the economy

Workspace sharing ideas using laptops and drawings

Guest blogger Katrin Kircheis talks about strategies to support businesses during economic crisis.

Almost two years ago, I wrote this blog for eLearning Industry: 4 Practical Tips To Inspire Learning In Your Business. One of the tips was about working ‘with experienced training and learning design freelancers to draw from their expertise’. My reasoning behind this was that if money is tight, the training department is often the last to receive funding or budget allocations. That’s even if they have a training department. Freelancers are a great option as you can work with them on a flexible basis, rather than having to justify the money for a(nother) employee.

The gig economy has been growing for a while now, outsourcing certain functions including people development, marketing, accounting, HR, even assembling products has been a huge cost saver for businesses. Unfortunately, due to the pandemic, most of them had to let people go, so why not give them a chance at becoming their own entrepreneurs?

Semco, a Brazilian manufacturing giant, did exactly that in the 1980s during one of the worst economic crises the country has experienced to date. They rented out factory space and equipment to previous employees and helped them set up their own businesses. They took on these previous employees as suppliers and allowed them to sell to anyone else, including Semco’s competitors. This saved them a lot of overhead costs, stockpiling and warehousing of unused materials and machinery, and from having to make people redundant without an alternative. They were one of the only companies during that time that did not make a loss and returned profits after just a few months.

Now seems the perfect time for many businesses around the world to try the same: outsource tasks to previous employees, because your finances, marketing, training, all still needs to be done. Work with people you already know and trust on a more ad-hoc basis and help them start their own business.

Here are my three reasons how this could save economies:

  1. Businesses do not have to close because they save on overhead costs.
  2. Fewer people are unemployed. They might still need extra help, but they put money back into the economy.
  3. People who have a higher stake in their business, aka business owners, are more innovative and likely to improve existing or create better products and services to get people and businesses to spend money.

What are your thoughts? Do you agree, can you think of more reasons, or do you not believe this could work?

Katrin Kircheis

From a very young age, Katrin's dream was to become a teacher. However, she soon found out that by being one, kids and teenagers can be quite exhausting and changed course. She started travelling and stayed in places like Iceland and Australia. This gave her the opportunity to meet people from different backgrounds and get to know their outlook in life. Seven years ago, she moved from Germany to London where she settled down and found her new passion – teaching adults.

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