How Outsourcing Can Help You Prepare for a Recession

Written by Ashley Dameron

May 16, 2022

Inflation is at a 40 year high, the stock market is taking losses, and experts can’t seem to agree, are we headed for a recession? The uncertainty would certainly make any business owner uneasy. Whether a recession is coming or not, leaders should always be prepared for worst-case scenario. If we learned anything from the Pandemic, it was that companies needed to be agile, and prepare for the unexpected. While the market continues to experience volatility, companies need to be positioned for scalability. Here are 4 ways outsourcing can help you prepare for a recession.

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1. Less Staff to Manage

When companies outsource back-office processes like Finance and Accounting, Payroll, and other HR tasks, they no longer have a need for a large, in-house corporate team. Managing the people and the processes under Accounting and HR requires a heavy lift and a large number of resources. Not to mention, finding expert controllers, ap processors, tax and benefit specialists, or payroll processors is difficult. The labor shortage has created a deficit in expert workers. Chances are, companies are probably working with a skeleton staff and a CPA or Payroll firm.  Either way, most leaders prefer to be focused on customer-facing staff, customer service, and business strategy. Outsourcing operations takes the weight off leadership, and gives them the ability to focus on the priorities that matter most. In reality, managing an in-house corporate staff and partnerships with multiple providers takes away from the overall goals of business leaders.


2. Less Overhead

Outsourced operations significantly reduces overhead. Leaders no longer have to cobble together support staff with an outside provider. Employee salaries and benefits and the fee’s companies may pay a CPA firm or Payroll company are significantly reduced when you’re working with one partner. Without a large, corporate staff, the need for office space is eliminated. Additionally, the need to invest in and maintain technology is reduced, as most outsourcing providers have their own tech stack they offer at a more economical cost.

With reduced overhead, companies can refocus resources on the areas of the business that provide an ROI, or directly affect success.


3. Flexibility

Companies who leverage outsourced services have the ability to scale. Not only can outsourcing allow companies to grow more rapidly, it also gives them the ability to scale down in the case of a recession. During economic hardship, businesses often close. If leaders need to offload a number of stores quickly, having an outsourcing partner helps make the processes smoother and more efficient. There’s no need to lay-off corporate staff, and leaders can focus on the sale of those locations.  Similarly, if a company is acquiring additional locations, transitioning those additional stores is much easier, as the team and processes are already in place.


4. Insight

The right outsourcing provider will be able to offer leaders best practices and insight as experts who have been through a recession before. Enhanced reporting capabilities and integrated systems gives leaders a better view of business performance, allowing them to better forecast for the recession and hardship ahead. Outsourcing providers often understand compliance laws and regulations on federal, state, and local levels, easing compliance concerns.  Providers often provide additional services through third-party partnerships that can help reduce costs, provide additional benefits, and help find missing opportunities. The breadth of knowledge an outsourcing partner can provide is priceless, as many leaders will be looking for insight should we enter a recession in the near future.



Outsourcing can help you prepare for a recession by reducing staff and overhead, implementing cost savings, providing leaders the ability to scale, and providing insight and best practices so leaders can better navigate the economy. Leaders who not only wan to survive a recession but grow through it should be considering outsourcing back-office operations now. Though there are ways to implement the benefits through a companies own in-house team, outsourcing is the most efficient way to prepare for a recession.




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