The outsourcing revolution: Why it’s no longer the domain of large corporations

For Alex Goold, the general manager at Sydney’s Woollahra Hotel, finding staff to work those tricky shifts isn’t as hard as it used to be.

“We essentially have three main positions in the hotel,” he tells SmartCompany. “Two of them revolve around bartending – one needs TAB and poker machine experience and the one needs cocktail experience – and the other is mainly food running.

“I’ve been able to find people on short notice to fill all three roles recently. And they’ve been good people – who are keen to work and open to new experiences and new ways of doing things.”

Goold’s been using OneShift, a website that pairs backpackers and those seeking more flexible work with the businesses that need them for short periods of time. Founded by a 22-year-old who used to work at the Woollahra Hotel, Gen George, it’s had more than 171,000 users sign up in just 14 months.

“It’s a great service, and one we’ve found really useful,” Goold says. “We’re able to really narrow down the skills we need, and we’ve found people with those skills. You’re not just saying, ‘I need a bartender’, you’re saying, ‘I want a bartender who can do this cocktail’. And the people we’ve found, we keep their number on file. We’ve often used them again.”

The Woollahra Hotel is one of thousands of small businesses across Australia changing the way they work. They’re using online services to find short-term staff, get things done, and free up their time.

In the past, companies wanting to find qualified, short-term labour had to hire a temp agency to outsource their search and bring in the workers. These days, they can just enter a few details on a website and let its automated search pair them up with people cheaply and quickly. It works a whole lot cheaper than searching for the casual staff themselves.

Since the 1980s, large corporations have outsourced pretty much all they can to other specialist businesses able to do that work quicker, cheaper and better.

Corporations turn to outsourcing to be flexible – to be able to react more quickly to the strategic needs of the business. But until recently, the ability to tap into talent when and as needed has eluded small businesses.

The main reason for this has been cost. The transactional costs and organisational difficulties of outsourcing have in the past proved beyond most small businesses.

Not anymore. These days, there’s a myriad of online services using economics of scale to deliver outsourced business solutions at a fraction of the cost of traditional business service firms. From recruitment to design, legal services to accounting, these services keep costs low by automating everything they can. They offer outsourcing solutions for small businesses without the price tag that normally comes with it.

There’s plenty of data marking this shift, showing that outsourcing is no longer the domain of the corporation.

Last week, global outsourcing company oDesk announced it had helped facilitate more than $US1 billion worth of outsourced projects. A staggering 58% of the businesses who use oDesk classified themselves as start-ups, the company said. The benefits of outsourcing, long embraced by large companies, are becoming available to all.

And Australians are taking it up more than most. According to oDesk, which operates worldwide, Australia is their top hiring country based on spend per capital. Over 53,000 separate Australian businesses used oDesk in 2012, posting almost 81,000 jobs. The top industries being outsourced by Australians on oDesk are human resources, payroll and recruiting (up 227% on last year), and legal services (up 267%).

It’s not just international outsourcing websites getting in on the act. Freelancer.com, based in Sydney, sees most of its business from SMEs, says Nikki Parker, who heads up the business in Australia and New Zealand.

“SMEs and business owners often try to do everything. And they can’t,” she tellsSmartCompany.

“The best thing for a business to grow is for them to focus on what they’re good at, and outsource the rest.

“For small businesses who want to grow, the best way for them to cover what they need done and focus on what they do best is to outsource, without the expense of hiring people before they need them full-time.”

It’s not just about flexibility and only paying for what you use. Outsourcing opens up a world of talent to small businesses, and its talent they can draw on cheaply and quickly.

This is one of the most exciting things about the outsourcing revolution, says futurist Ross Dawson.

“Work can and will be done anywhere in the world,” he says. “Australia’s future success depends on us tapping the best local talent, so it’s exciting to see Australian businesses in the vanguard.”