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Which Functions You Should Outsource and Which Ones You Should Not

June 22 2017 - When the idea of outsourcing comes up, the next question arises - outsource what? Not all functions can be outsourced, and not all functions that can be outsourced should be. Let's discuss which functions should be outsourced and which should not.

Search Engine Optimization

Outsource search engine optimization tasks. An SEO expert will be able to improve your company's website, social media profiles and content to improve its rankings in various types of searches. And, they have skills your internal IT department lacks. It is also cheaper to hire outsourcing experts when required instead of keeping one expert on hand while trying to keep them busy enough to justify their pay.

Social Media

Social media should be outsourced to experts, and we're not talking about your intern who happens to have multiple social media accounts. A social media firm knows how to design social media profiles consistently across every platform while capitalizing on the strengths of each. They have people who post content across these sites daily, and they know how to add the right hashtags and when to post to generate the most views of the shared content. Sites like make it possible to find the right type of social media expert for your particular project.

Website Design and Maintenance

While there are a number of reasons not to outsource your core IT functions like user account maintenance and database management, website design and maintenance is an excellent choice for outsourcing. A website design is best left to the experts, and website hosting and maintenance is ideally outsourced. By outsourcing the website hosting and maintenance, you let your IT department focus on mission critical software while letting IT security experts protect your web portal along with everyone else's.

Payroll and Taxes

Bookkeepers have been tracking accounts receivable, generating invoices and handling payroll for small businesses for years. The outsourcing of these functions has thus been common for small businesses, and the internet and software specifically to support this type of outsourcing makes it possible for large businesses. Let payroll management firms handle 401K loans, payday loans, child support collection notices and other issues that would otherwise drown your Human Resources department. Some companies outsource the entire hiring process up to the point someone is onboarded, though most companies still want to review and approve applicants.

Termination Management

Hiring someone outside the organization for layoffs or firing prominent personnel may be done to save the remaining management the stress, but this job should not be outsourced. First, it tells your employees that you don't care about those who are losing their jobs. Second, it interferes with the hard conversations that often take place as part of the exit interview. What is killing your organization? What problems will this be the last time you'd be able to learn about? Third, it hurts morale of those who remain. Fourth, it makes your employees afraid of any future management consultant being brought in.

Employee Development

Employee development is a very personal matter specific to your company and might be close to impossible to outsource depending on the nature of your business. Outsourcing this function might be problematic since your employees may end up acquiring general skills that are not necessarily in line with your business's philosophy and objectives. Industry best practices may help to a certain extent, but at the end of the day, only you truly know your employees. If you're struggling with some of the most technical aspects of employee development, there are plenty of training courses and online learning options that could help you with the fundamentals.

Performance Management

Performance management is another very personal aspect of your business that needs a hands on approach. However, in this case, the help of a third party may actually be beneficial. It has been shown that employee performance is greatly increased when employees' personal goals and the company's overall strategy are closely intertwined. But annual reports tend to give only an historical review and are not always a clear indication that the individual objective and performance of employees is directly in line with the company's goals and objectives.

In this case, hiring a third party consultant might be a good option to get a second perspective. The key goals of the CEO should be distilled and trickle down every part of the control chain, all the way down to each and every employee of the company. In some cases, this can only be done using advanced analytics and state of the art systems and processes which may not be mastered by every business owner.


Security is something you should think twice about outsourcing. Hiring a security company to provide basic security guards is practical, but if you have concerns about theft or violence, you should have internal security measures as well. Your data security is something you should keep in house, though it may be backed up by regular external IT security audits, since your company is entirely liable for data breaches. It is also in your interest to maintain your own processes to control access to confidential business data, so that someone at a third party firm cannot steal or leak it.

Succession Planning

Succession planning is an internal matter that is essential to the survival of your company. While you might outsource employee recruitment for the lower levels of the organization chart, succession planning for business owners or the board is best handled in house. Consult with legal experts as required, but the final decision must be your own.


When choosing which options you should outsource, you should go with IT functions that are not essential to the day to day operations of your business such as search engine optimization, social media, website design and web hosting. You should consider outsourcing payroll and taxes, but not all HR functions. Termination management and succession planning should be kept internal. Security is an area where you should consider supplementing your own talent with third parties.

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