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A Guide to Calculating ROI for Outsourced Sales Teams

A Guide to Calculating ROI for Outsourced Sales Teams

As with every aspect of your business, understanding the cost breakdown is the fiscally responsible thing to do. You could have an accountant who helps track all your costs, or maybe you’re starting a new venture and need to understand the cash flow better. Calculating your business’s return on investment (ROI) is crucial, but breaking it down by business sector can be more beneficial. According to Statista, the global business process outsourcing (BPO) market will hit US $390 billion in 2024.

The more informed you are, the better long-term decisions you can make to ensure success for your business. Do you have a plan in place measuring the financial strengths of your business? It’s time to jump into the ROI formula for sales, specifically for outsourced sales teams.

What is ROI for Outsourced Teams?

Suppose you have dealt with remote workers or outsourced aspects of your business before; that’s great. If you don’t, there is no need to worry. This guide is meant to set you up for success in working with an outsourcing partner like OSI.

ROI for outsourced teams accounts for all the costs associated with retaining their services versus the value brought into the business. The value could be monetary, tasks completed, or the number of customers serviced. Still, tracking the predetermined key performance indicators (KPI) you’ve chosen for your business ensures the investment makes financial sense.

Why ROI Matters in Sales Outsourcing

Specifically, an ROI formula for sales ensures you and your outsourcing partner have clear goals and expectations for the most fruitful partnership. Before explaining what precisely goes into the ROI formula, it’s important to pull back and look at the bigger picture of why you need to be vigilant:

  • Risk mitigation: Understand any risks with outsourcing and plan for contingencies. What metrics or behavioral concerns are deal breakers?
  • Long-term planning: Calculating ROI is not a one-and-done activity. Consistent checking on the ROI needs to be a part of your monthly/quarterly sales numbers; you’ll use it to help forecast future revenue.
  • Financial responsibilities: Ultimately, you’re answering to the business’s success or failure, so determining the full impact of every aspect could make or break your business. You might be able to spot something that needs to change with enough time to correct it.

Components of the ROI Formula for Sales

Although the formula looks relatively simple, understanding it and including the correct numbers make all the difference.

ROI = [Net Investment (Profit-Cost of Investment)/Cost of Investment] X 100%

Example Scenario:

You’ve calculated that the initial cost for a second office is $75,000. In the first six months, the profit from the sales is $300,000 minus your initial $75,000 investment, making your net return $225,000.

Formula from Scenario:

[($300,000 – $75,000)/$75,000] X 100% = 300%

With the high-level ROI formula for sales now laid out, it’s time to learn what goes into those data points.

Calculating ROI

It’s one thing to know the formula, and it’s another to ensure the data included in the formula is accurate.

  1. Initial Costs: Costs associated with the venture at the beginning of the process, training costs to get the outsourced team up to speed, technology improvements to match what is needed for your business, setup fees to start the business relationship, and travel costs if you need to spend time with the group in person.
  2. Ongoing Operational Costs: Ongoing costs would include salaries, facility costs, commissions, outsourced management fees, and anything to run the day-to-day operations of the business.
  3. Revenue Generated: Direct and indirect sales that are closed through the outsourced sales team.
  4. Calculate the ROI: Once you have gathered all the needed data, you can plug that into the ROI formula for sales:

ROI = [Net Investment (Profit-Cost of Investment)/Cost of Investment] X 100%

Here’s another item: top-performing sales organizations conduct at least six annual role-plays with their sales force. That could be with a company or you, the business owner, but the ongoing training needs to be accounted for.

Common Pitfalls to Avoid

Understanding and executing the formula to start a relationship is great. Still, some areas can, and will, pop up if you aren’t diligent or don’t have transparent practices to gather what is needed accurately.

  • Overestimating or miscalculating your revenue.
  • Before starting the process, you don’t fully understand the time needed to get up to speed.
  • Misunderstanding the operational or indirect costs will affect the ROI.
  • There is no clear ongoing measurement plan: costs and margins change so that the ROI will fluctuate.

According to Hubspot, on average, a new sales rep will take 3.2 months to ramp up to total productivity. Work with your outsourcing partner to help avoid these pitfalls and address any questions.

Understand the ROI for Outsourced Sales Teams

You’re embarking on a significant business investment by outsourcing your sales team. You aren’t taking it lightly, and neither should your outsourcing partner. Use the ROI formula for sales to determine a minimum viable return needed to ensure success and be transparent with every member of the decision-making and partner levels. The more awareness there is of the goals, the better off you will be.

OSI is a premier outsourcing partner with many years of experience across multiple verticals, including sales, accounting, IT support, customer service, operations, and more! Contact us today to see how we can make your move into outsourcing as smooth as it can be.

Comparing Outsourcing Locations: Nearshore vs. Onshore vs. Offshore

Flexibility is the hallmark of a great business. Outsourcing in various forms gives your organization the agility of a world-class boxer in your business. You can bob, weave, and engage with outside talent when needed instead of keeping someone on the payroll. These methods are especially advantageous for startups with tight capital or legacy businesses looking to evolve. Did you know there are three main options -onshore vs. nearshore vs. offshore – to choose from?

Why You Should Consider Outsourcing

Every business is like a snowflake; no two are alike, so every viable business option should be on the table. Whether your business is in software development, manufacturing, tax services, or even a law firm, there is an outsourcing option right for you. A recent Deloitte survey shows the top objectives for companies looking to outsource aspects of their business are:

  • Cost-reduction
  • The tight local hiring market
  • More opportunities due to global business practice standardization

Outsourcing is no longer reserved for the most prominent organizations in the world. No matter your size, you can utilize the benefits of outsourcing. Thirty-seven percent of small businesses now outsource at least one business process. Let’s review the outsourcing options of onshore vs. nearshore vs. offshore.

What is Onshore Outsourcing?

Onshore outsourcing involves using talent from the country where your business resides. You can think of this as freelance or contract workers from “local” locations. You will pay a premium for the onshore option, as the cost of living and everyday expenses will be the same as what you currently pay for employees on payroll.

Why Choose Onshore Outsourcing?

A few benefits of onshore outsourcing include choosing individuals who can come onsite for regular meetings, reduced cultural misunderstanding, and no monetary conversion fluctuations. If you have a project that requires only limited time, this could be your best option. Typically, nearshore or offshore options want longer-term project commitments. Based on the project’s needs, your potential talent pool could be less with onshore outsourcing.

What is Nearshore Outsourcing?

Nearshore outsourcing encompasses talent whose location is physically near the country where the main business resides. For example, if your company was based in the United States, a nearshore outsourcing option would be Canada, Mexico, or El Salvador. A bonus with El Salvador is that the US Dollar is the national currency, so payment conversion issues are eliminated.

Why Choose Nearshore Outsourcing?

As with any project, you should expect some hiccups. A major advantage of nearshore outsourcing is the proximity to your main location. If an issue arises that requires you to physically be there, a plane trip is just a few short hours away. Shared time zones are another chef’s kiss of choosing nearshore. Potential issues related to reaction times to projects and communication needs will be greatly reduced compared to the fully offshore option.

What is Offshore Outsourcing?

Offshore outsourcing is typically located someplace else in the world from you and your business. Hot spots for offshore outsourcing are India, the Philippines, South America, and Eastern Europe, just to name a few. Offshore outsourcing options have increased from manufacturing to the entire spectrum of business processes.

Why Choose Offshore Outsourcing?

Offshore outsourcing is traditionally used for large projects for extended periods. Since offshore outsourcing is familiar, these places have established operations and deeply skilled workers to do virtually any job needed. According to Outsource Accelerator, a Filipino software developer with skills comparable to a US-based programmer’s will cost just 10 percent of their US counterpart. Offshore outsourcing can also be a massive windfall for physical production costs. Your overall costs will be significantly lower than the onshore option.

What Business Benefits Come from Onshore vs. Nearshore vs. Offshore Outsourcing?

The children’s story “Goldilocks and the Three Bears” comes to mind when thinking about onshore vs. nearshore vs. offshore outsourcing. You have three options, and all have their pros and cons, but when it comes down to it, nearshore outsourcing will, in most instances, be the best solution for you. It is not too far, which lengthens resolution times, and not too close, which raises the cost of the work being done. Nearshore is just right.

Here are more details as to why nearshore is a great choice: You get personnel relatively close in proximity, language and cultural issues are reduced, and, best of all, skilled workers for a more reasonable price than the onshore option.

Regardless of which option, onshore vs. nearshore vs. offshore, is right for you, the point is that you have a choice. The best part is that you get a staffing company well-versed in local talent, which lessens the load of having to find someone remotely.

OSI is Your Perfect Nearshore Option for Your Outsourcing Needs

Outsourcing has gone mainstream. Whether onshore vs. nearshore vs. offshore, don’t let your business struggle to find what it needs and when it needs it. If you are considering nearshore outsourcing, OSI services include a wide range of vocations, including IT, Accounting, Operations, and more!

Contact us today!

A Guide to Why Your Business Should Use a Staffing Agency

A Guide to Why Your Business Should Use a Staffing Agency

A Guide to Why Your Business Should Use a Staffing Agency

Today, we want to answer an essential question: why use a staffing agency? 

A staffing agency is a company that pairs people looking for jobs and employers. The staffing company manages their law-compliant contracts, their vacations, and even the termination of the contract. In other words, the talent they find works as an outsourced team for your company.  

So, why use a staffing agency? There can be many answers to this question, but it all comes down to its excellent benefits! 

Why Use a Staffing Agency: The Benefits  

Staffing companies offer a wide range of solutions. They can help you with temporary contracts, permanent placements, outsourced workforce, and even as a human resource consultant. This can help your company save time and stay law-compliant while using its experience and skill set to your benefit. 

As part of this guide, we’ll go through each stage of a staffing agency’s work and its pertinent benefits. 

Step 1: Looking For the Right Talent 

You already have work to do from the moment you post a job position on different hiring platforms. Going through hundreds of applications and looking for the right person for your team can be QUITE time-consuming. In fact, a new position takes an average of 42 days to fill, but this number can change depending on the industry. 

Well, a staffing agency has more tools that can allow them to make this task faster and more efficient. They already have databases, networks, and previous applicants that can be just the person that you’re looking for. And let’s remember they are a complete team of experienced talent hunters (instead of the one-person job you might encounter). 

Also, when it comes to the interviews, they already have different filters and tests to measure the applicants’ knowledge.   

Step 2: All Team Members Onboard! 

After finding the right candidate, staffing agencies take charge of administrative tasks, paperwork, and initial training, ensuring the contract is legally compliant, and the new employee has all the tools, introductions, and training to develop their work immediately. 

Working with a skilled staffing company can save you time and give you peace of mind, knowing someone highly specialized is taking care of your team’s selection, making sure everything is in order. 

Step 3: Talent Management and Effectiveness 

Now that the employee is hired and settled in, there are some other things that staffing agencies handle. 

They manage the administrative aspects of employment, including payroll, vacations, benefits, sick leaves, etc. Staffing companies handle all other administrative tasks that might appear in the way. This goes all the way down to the termination of their contract. This allows your company to focus on core business functions while ensuring that employment processes comply with relevant laws and regulations. 

Staffing Companies as Your Cost-Effective Solution 

In other words, staffing companies can help you find specialized talent tailored to your needs in record time. They save you time and money that your team can spend focusing on their day-to-day activities without going out of their way to look for candidates and managing new talent. 

They also have the expertise to know what to look for, ask the right questions, and negotiate properly with the employee, especially if it’s a staffing company that specializes in certain areas, for example, technology, customer support, or law firms, to name a few. 

Why Should OSI Be Your Staffing Agency! 

At OSI, we count on 11 years of experience finding the right talent for companies. We find solutions tailored to your needs and know how to ensure quality, expertise, and effectiveness. Contact us, and let’s start finding the missing piece of your team’s success.

What Is a Staffing Company and How Can It Benefit Your Business

What Is a Staffing Company and How Can It Benefit Your Business? 

What Is a Staffing Company and How Can It Benefit Your Business

Adding new talent to your team can be a hefty task. You’ve got to spell out the job requirements, run interviews, add them to your payroll, go through the orientation process, and so much more. Quite a process, right? But what if you could wish to the universe for the perfect team member, and voila, they appear? Well, that’s what a staffing company is. 

What Is a Staffing Company 

So, let’s start by defining a staffing company. Staffing companies, also known as staffing agencies, match job seekers with companies looking for new talent. They handle the recruitment and hiring processes and continue to manage the employees throughout their contracts. Picture it as your personalized hiring assistant, taking care of all tasks associated with the new hiring. 

The difference between staffing companies and standard contract employment is that workers are paid by the staffing agency, not the organization they are performing the work for. 

In other words, staffing companies are the ones that find candidates for your team, run interviews, hire the right talent, add them to their payroll, manage their vacations, monitor their performance, and even terminate their contracts. And you? You just tell them what you need, approve, and pay a monthly fee. There are different scenarios where companies turn to staffing agencies. 

Use Case 1: Sales Representatives for The Holiday Season 

Let’s say you work in a company that provides everything necessary to run an office: tons of paper, ink, and other supplies. And the holidays are your busiest time of the year. Wouldn’t having an extra pair of hands for the season be great? 

Hiring sales representatives for the holiday season is something many companies do to prepare themselves for the holidays. According to TimeRack, 16 million temporary employees are hired every year.   

Hiring your extra help for the holiday season through a staffing company can save you a lot of time and effort. The staffing agency can handle everything from finding the right reps to ending their contract. 

Use Case 2: You Need Special Skill for a New Project 

Let’s say you’re a telecom company developing a new product to innovate within the industry. But you need the help of a programmer with a specialized skill set in this project. 

This leads to two significant challenges: 1) Finding the person with the specialized skill set (since it’s a complex profile to find) and 2) Taking a load of work just for the talent of one single player. The time you can invest in preparing yourself and your team for the project. 

In this case, hiring through a staffing agency can be the best choice. They have a vast talent pool where they can easily find any profile you’re looking for and have experience working with project-based people. So, it could be a massive task for your team, but it can be a breeze for an experienced staffing company. 

Use Case 3: Workforce in Manufacturing Is Being Hard to Find 

Hiring for manufacturing is not easy. Handling a large number of people and organizing them to operate the equipment can be very complicated, specifically when day-to-day events happen, someone falls sick, asks for vacation, or quits. 

This is one of many problems; according to The Manufacturing Institute, 93% of respondents were struggling to find the talent they needed for their companies. So, how can a staffing company help in this situation? 

Companies can rely on extra help to find the right talent, they can also manage to have an outsourced team to navigate workforce fluctuation, and they can also downsize and grow their team when needed. A competent staffing company can be the partner manufacturers didn’t know they needed! 

Interested in Finding the Perfect Staffing Company? Meet OSI! 

At Outsourcing Services International (OSI), we are experts in helping companies worldwide with their staffing needs. Let us know what you need, and we will find the right solution or talent. We count on highly qualified talent who are eager to meet you! Contact us and learn more about our services and our top-notch hiring skills.

Eleven, to the next level

OSI celebrated its 11th anniversary with a full house.
As if to make a wish, on the 11th day of the 11th month, OSI turned 11. What started with 20 people now has almost 200 member representatives who made it possible to reach this milestone.

While being conscious of social distancing, OSI had a great turn out for the 11-year celebration;
we organized a live broadcast for all staff members. Two of OSI founders: our President Joel Ciniero and founding member Anthony Zabit, said a few words to commemorate this anniversary success story.

Anthony Zabit shared a sentiment of joy as a result of reaching this important milestone and shared his happiness with his decision to become a neighbor with everyone in attendance having recently moved with his wife and children to El Salvador.
“I want to start by thanking you all, for welcoming me to your beautiful country; on August 1st,
I moved with my wife and children here. We are all very happy to be living here in San Salvador. Thanks again for 11 wonderful years; I always loved El Salvador, and I remain committed to this country and its people’s success. Thank you very much”, said Zabit.

“Everyone is 11 years old today”. Please take a moment and feel the excitement, the sense of wonder, and the future possibilities of being 11 years old; that was part of the message from Joel Ciniero, President of OSI; referring to the fact that we are all entering a time where we will better understand what has been built in these ten years and that turning 11 begins a new stage of growth where OSI can better use its skills and size to tackle future opportunities.

“Today, not just OSI is 11; everyone here that is hearing me today is also 11. I want to thank you for being part of the this 
11-year-old body and I look forward to growing up with you to be healthy adults together”.

Said Joel Ciniero.

Turning 11 years old is synonymous with a new beginning. It is where we stop being children and begin to grow, where we better understand the why of things, develop a strong sense of self, and perfect the capabilities of our physical development. So it is for OSI on its 11th birthday. We are bigger, we are better, and we are stronger than before. Without you, OSI could not be 11. Thank you for making these 11 years possible.

“I come to work every day, and each one of you reminds me that we are growing. With our work, we create a lot of good for El Salvador as well as in the countries where we offer our services. Thank you for your participation in this great organization called OSI. Without you, there would be no me.
I believe in you, and our clients believe in you. Thank you very much for everything”, said Joel Ciniero.

Happy Anniversary OSI