How an Outsourcing Company Can Help Survive Effects of Recession?

How an Outsourcing Company Can Help You Survive the Effects of Recession?

3287 Views | 6 min | June 12, 2020
Recession and Outsourcing

Can you survive the Effects of Recession with the help of an Outsourcing Company? Let’s find out.

We have to admit it! 

A recession is ahead of us all and we need to survive its effects by hook or by crook. The world economy that was stable until the start of this year is now on its knees and businesses around the world are looking for ways to survive by cutting costs.

With several looming threats ahead – the companies of all sizes and shapes need to prepare for the challenging period. However, startups need to prepare themselves fast as they will be the ones to first feel the immense effects of recession.

To the tech entrepreneurs wondering how to survive an economic crisis – obviously, stopping operations is not a viable option. One out of a few solutions that can help them in survival during these unprecedented times is Outsourcing.

In this article, you will see all the Ins and Outs of Outsourcing Services to find whether it is a good option for you or not. So, let’s get started. 

Recession and Outsourcing Relation - A Spotlight On the History

Learning lessons from history is always a smart move. Before 2020, the entire world encountered the effects of recession in the year 2007-2009. 

Back then, technology was not as advanced as it is today and as a result many startups of that time never saw the light of the day again. But, on the other hand, a number of innovative startups like Uber, Airbnb, and Whatsapp found their way to success at the same time.

Even before this great recession, a number of famous brands like Google (in 1999), Microsoft (in 1973 crisis), and Salesforce (in 1999) encountered recession in the early days right after their inception.

So, if you are a budding entrepreneur thinking that your startup is in danger – you are right – it is. But, it is not at all impossible to emerge out of this situation and run your operations like a pro.

The only thing that is common in all of the above-mentioned start-ups that kept them going was a will to find solutions that create a difference by understanding the need of the hour. They took advantage of processes like outsourcing and are worth billions of dollars today.

Let’s now have a look at five great examples of companies that are built by leveraging outsourcing services amid a recession. And, by the end of this section – you will have a clear idea of how IT Outsourcing can help you build your business amid a recession.

5 Iconic Companies That Used Outsourcing Services In a Recession

outsourcing company

1. WhatsApp

The world’s most downloaded messaging app – Whatsapp – was founded amid the great recession of 2007-2009. However, its roots lie in taking outsourcing stories to an entirely different direction – to Russia rather than China or India. 

In its initial days, Whatsapp was just a small firm of 30 employees in Mountain View. Can you believe it? Today, WhatsApp has grown to be one of the most well-known chat applications used all over the world which was purchased by Facebook for $19 billion just after two years of its launch.

Do you think the company experienced this immense growth by relying solely on those 30 employees? Absolutely, not. To keep their operation cost minimum, Whatsapp outsourced development to a team of developers in Russia. Have a look at the story of Whatsapp’s first iOS developer who was outsourced. When the app got popularity, some of these Russian developers were relocated to the USA.

Key TakeAway: There is talent everywhere around the world. If you are planning to build a world-class product while minimizing expenses, outsourcing services is the best option. Just like WhatsApp, you too can build an app of your dreams.

2. Alibaba

Alibaba was founded in the year 1999 and it has survived a number of recessions till now. 

According to a book by Jack Ma, on the story behind making the World’s Largest Online Marketplace, they outsourced their web development work to a U.S. firm in their initial days. 

At that time, web developers in China were less, while developers in the U.S. were available at cheap prices because of the recession despite having the great skills that Alibaba needed. 

Also, during that time, Ma needed to discover workarounds and strong approaches to develop his organization conquering all Chinese internet restrictions. Presently, the organization still depends on outsourcing services for IT work which proves that it is actually a feasible alternative when you need to grow and lack support in your current location.

Key TakeAway: The takeaway here is that a startup shouldn’t stop scaling not even when a recession is ahead. You simply need to pay special attention to better and less expensive resources accessible at the moment to scale your operations – no matter what lies ahead – a recession or economic downfall.

recession and outsourcing

3. Google

If there is an organization that is a perfect example of incredible policies for its employees while scaling effectively, it’s Google. Just like Alibaba, the company has seen many recessions but is still standing straight because of a reason.

That reason is not limiting on borders when it comes to hiring talent. Google has been outsourcing IT services to remote teams for quite a long time and seeing amazing advantages. They outsource everything from IT work to development and more. 

Key TakeAway: During a downturn, it is urgent to find the right balance between your teams, you should think about your expenses, needs, and your budget constraints to find an effective solution and outsourcing IT services provides them all.

4. Apple

Apple is known to outsource its manufacturing work from China. However, it is true that one in each three Apple engineers is outsourced. Also, the company continued this practice during the huge recession of 2008. In fact, at present as well, Apple still uses outsourcing services for IT and manufacturing. 

Apple believes that a lack of talented developers in the United States implies that it could take as long as nine months for the organization to find experienced employees who could make Apple’s products. In China, this takes just fifteen days. 

Key TakeAways: Don’t confine yourself when hiring talent. Finding the right team may include outsourcing to the world anywhere and a recession is the best time to hire talent on cheap prices as a number of companies are laying down staff these days

5. Skype

Skype was one of the most disruptive applications during the mid-2000s. The idea of Dane Janus Friis and Niklas Zennström wouldn’t have been a piece of our lives if they had not outsourced the back-end development of the application to the Estonian app developers.

Just like Whatsapp, the company initially outsourced the development and later on brought these developers in as partners. If Skype had not been willing to outsource work to the right engineers in Estonia, maybe it probably won’t be what it is today.

Key TakeAways: Hiring a remote mobile app outsourcing company doesn’t have to be always about the budget; it is also about finding the right partner to improve the efficiency of your business.

That’s it. Every one of these stories should have given you an idea of how using outsourcing can positively affect your business. In particular, outsourcing some part of your client work, or even a part or two of your product development during a downturn can benefit you in many ways.

Let’s now see, how:

Why Outsourcing is the Best Way to Stay Afloat During a Recession?

outsourcing application development

1. It Helps You Cut Cost On Operations

Reducing costs should be the number one goal of every business during an economic downturn. And while working with an outsourcing company – you can cut costs for tasks that do not need a full-time team. 

Furthermore, since you are outsourcing your low maintenance needs, you will have the option to retain the employees who are more important to your organization. When compared to having an in-house team, outsourcing ends up being a cost-effective option since you will be paying a fixed amount to the company providing outsourcing services and not to every one of your employees.

Also Read: How to Track the Productivity of Resources While Outsourcing App Development

2. Less Stress For Employees

During a downturn, because of layoffs, increased work pressure is normal for remaining employees. Outsourcing is a great way to maintain a strategic distance from that extra pressure and the resulting effect on morale because of over-burden. 

3. No OverHead of Benefits

Reducing expenses during a downturn can prompt a loss of benefits for your staff. If you outsource certain departments, for example, IT or Marketing, you won’t need to pay any overhead benefits for those people. It will allow you to save benefits for your current employees. 

4. Improved Economic Efficiency

At the point when work duties get shifted among a team of employees that has shrunk because of a downturn, higher-level employees may end up wasting time on low-value tasks. Outsourcing assists in solving this problem before it turns into an issue for small to medium-sized organizations. 

5. Better Scaling Opportunities

The only thing that shouldn’t be stopped while operating a startup is Scaling. 

During a downturn, in case you’re planning to expand your team or intensely investing in other operating costs, the scaling can be all the more scary. Because onboarding is one of the most costly HR costs most organizations have. 

Scaling through outsourcing gives you chances to explore your choices without doing investment in the long run. It gives you better responsiveness, letting you hit the ground running as opposed to investing time in training new people on your organization’s methods and missions.

Now that we have seen many examples and benefits of IT Outsourcing amid a recession – let’s now see how Apptunix (a Software Development Outsourcing Company) can help you in keeping your business operations running during these unprecedented times.

How Apptunix Can Help You Survive the Effects of Recession?

If you are a growth-oriented entrepreneur wondering what steps you need to take to overcome the effects of recession for operating your business successfully – we can help you.

Apptunix is one of the best software development companies providing outsourcing services all over the world to help tech minds in innovation. We have a team of 100+ enthusiastic developers who are passionate about transforming the world with technology. 

Amid the 2020 recession, we have helped a number of businesses in the development of their tech-solutions that were the need of the hour for them and we are continuing to do so. Hire our developers for all your outsourcing needs and build the business of your dreams in this tough time.

why outsourcing

Rate this article!

Bad Article
Strange Article
Boring Article
Good Article
Love Article

Tags: , , , , , ,