The last several years have brought us the disasters of the Covid pandemic and the Russian invasion of Ukraine. Next, we are facing a global recession. The United States’ economy has contracted the last two quarters, fufilling the historical definition for recession.
However, experts say that this recession will be without precedent. In fact, unemployment rates are low, companies have a lot of cash, and the Federal Reserve continues to raise rates to help beat inflation. None of these situations took place during recessions in the past, which makes today’s situation better than it could be.
But that’s what the data says about the U.S., so what about Europe?
Even though Russia’s energy blackmail and barbaric invasion of Ukraine have hit the EU hard, the consumption didn’t slump, and the labor market still has a low unemployment rate. Europe’s main issue is soaring energy prices, due to supply disruptions and bottlenecks.
Still, even if the recession will be mild (as former Federal Reserve economist Claudia Sahm assumes), companies need to prepare. As we all know, businesses are on the front line when it comes to the impact of the economic downturn, but if you think there is nothing you can do, we have good news for you.
There IS a way to lower recession consequences and keep your business afloat — outsourcing.
Despite many people’s skepticism, tech-giants like Apple, IBM, Skype, Microsoft, and Cisco have successfully implemented outsourcing strategies during economic downturns. Thankfully, these strategies also apply to smaller businesses as well.
If you are not sure if this will help your company, here is the list of issues that can be solved by outsourcing during a recession:
Cost efficiency
Every company has activities that do not require full-time employees. Depending on your main services, you must acknowledge which processes take most of the time and bring poor results. For example, tech start-ups can outsource their marketing and staffing, or hire a dedicated team to adapt their product for a new platform. You can also hire a team from regions with great talent and low cost, like Eastern Europe countries.
In Pecode, we understand both sides of outsourcing. Companies chose us to design and create their products, quickly and competently. While we also delegate small tasks to our partners in other locations. Over the last two years, we have taken dozens of projects from 85+ clients from all around the world, and guess what? Their benefits skyrocketed. Their cost efficiency improved, product quality improved, and they were able to refocus their energy on other things.
Core competencies struggling
During an economic downturn, you will have problems with selling your product or services due to lower activity and market changes. Still, you need to keep doing what you do the best, even if it means postponing brand-new features.
The best way is to focus on the things you’re doing the best and widen your services and expertise inside the specific service offer. For example, if you’re a product company, it will be better for you to outsource the transition of your app to a new platform, while your in-house team can stick to nailing the existing version for current users. Scale what you have first.
Employees health
When you have to lay off low-level employees, their tasks will be reassigned to high level-employees. That means dumping their productivity, overwork schedule, burnout, mental health issues, and plummeting the quality of the high-priority job.
Never let it happen. Define the list of low-priority tasks and outsource them.
Also, consider optimizing your remote workflow. Here is a guide we published earlier
Lack of competence in a specific field
You can be an expert in design and development. However, when it comes to creating a massive and complex product, you will need a team of skilled QA Engineers to ensure that your product is working well.
Outsourcing allows you to deliver the best results even if you don’t have suitable people on your team. When you’re not sure if your employees have enough expertise to handle a particular process, outsource it.
Promotion dilemma
It’s crucial to keep your marketing activities even during the recession. The question is how you will make it. Outsourcing allows you to choose between a delegation of marketing processes, splitting them between in-house and partner teams, or outsourcing some of your tech-oriented problems in order to focus on seeking new possibilities.
Your decision depends on the people you already have on your team, your budget, and your strategic focus. If you see that you have new prospects to discover or you need to change your business strategy, we will cover your back with tech tasks. You can always rely on us in providing you with top-notch solutions in Web & Mobile Development, Automated and Manual QA, and UX\UI Design.
Partnerships
It’s easier to survive when there is more than one. By outsourcing your processes you can find a reliable partner and turn your cooperation into joint work on different projects. Ideally, it must be a mix of different but adjacent services.
Bring your efforts together to find better clients and offer them a broader range of services.
Summary
No one knows what lies ahead. We’re entering a completely new economic era that will start with new challenges for entrepreneurs and their businesses.
However, we believe that all the pieces of advice you’ve read in this article will help you to save and even scale your business during the upcoming recession. We are also happy to help you with your tech tasks and create an exceptional product for you. If you’re interested in cooperation – contact us via the form below or via hello@pecodesoftware.com
