Despite some positive signs in the economy, companies are hedging their bets on an inevitable economic downturn. From financial institutions to tech enterprises, many corporations have instituted mass layoffs or hiring freezes. According to our exclusive 2023 CFO Outlook Report, 83% of CFOs either have a hiring freeze in place or are preparing for one.
These findings are hardly surprising. One of the first things you as a leader are apt to do when recession-proofing your organization is to pull back. But letting people go and halting recruitment efforts can have unwelcome short- and long-term impacts as remaining employees struggle to absorb extra work. And that can severely impact morale, productivity, and engagement.
The most reasonable and affordable way to avoid these problems is by co-sourcing with reliable third-party providers. That way, short-staffed teams can bypass the instability that comes with having fewer resources. A co-sourcing partner is capable of taking care of things at a tactical level and making sure you get the most out of the resources you already have — your money, your people, and your time.
Take payroll, for example. If you’re in the middle of an acquisition or divestiture (or even if you’re not) and you lay off workers or set up a hiring freeze, your payroll team may have trouble getting everything done, causing them to miss important deadlines. And if employees or vendors aren't paid on time or as expected, you may have an even bigger problem on your hands.
Co-sourcing ensures that your critical needs are met so that you can be among the businesses that thrive in a recession. But before entering into any co-sourcing arrangements, you have to make sure your C-suite is on board first.
Why C-suite buy-in is necessary for co-sourcing success: dispelling the myths
If your C-suite doesn’t understand the innate value of co-sourcing, they might feel like it’s not worth paying for. This puts the onus on you to help them understand how co-sourcing relationships work and how valuable they can be. Otherwise, their skepticism can become a self-fulfilling prophecy as the C-suite’s misaligned attitudes trickle down to other parts of the company.
A good way to start the conversation is to dispel three common co-sourcing myths.
1. No third-party co-sourcing partner will ever care about your business as much as you do
Sometimes, that’s true — but not always. There are many co-sourcing partners that want to have collaborative relationships with customers and have invested in the tools to do that. It is possible to find a proactive partner that can not only keep up with patterns, trends, and discrepancies but also tell you ahead of time when something is off so you can course correct early.
2. If you have a payroll manager, you won't need to co-source any of the manager's responsibilities
Your payroll strategy will always come from your company, and that should always be your payroll manager's job. But when it comes to administrative tasks, there is so much room for an outsourcing partner to come in and help — freeing up your payroll, HR, or finance managers to strategize — which will be better for your business overall.
3. Outsourcing is not worth the investment
This may be the most common myth of all, but the ability to cut costs was a major driver for executives when it came to outsourcing last year. According to the 2022 Deloitte Global Outsourcing Survey, over half of surveyed executives said their main reason for outsourcing was the "overall need to cut costs," and the runner-up had everything to do with strategy.
By addressing these myths with your C-suite, hopefully they will begin to see the benefit of scalability during these uncertain times. With the right co-sourcing partner, you will have the flexibility to make changes to your services based on what your business needs at that moment.
Above all else, co-sourcing companies have the specialized talent and advanced systems to jump right in and work side by side with your organization’s staff. They’re primed to do all those repeatable HR and finance tasks, like benefits processing and invoice payments. When a company's C-suite is willing to take full advantage of a dynamic co-sourcing partnership, that company is positioned to reap the advantages of genuinely win-win relationships.