Could Outsourcing Solve the Skills Gap?

A core challenge that successful agencies often face is how to balance growth with increasing payroll costs. The nature of creative businesses means a paradox has developed: recruitment is dependent on new client wins, yet to grow and retain clients, companies need spare workforce capacity.

Precisely when agencies choose to recruit, has a significant impact on growth and budgets. The challenge: in normal circumstances a tough one, has however been further exacerbated by the current skills gap. In the UK, this is said to be losing the country £63 billion a year of potential GDP. The story in the US is similar, with skills shortages resulting in $1 trillion in lost productivity each year.

Skills shortages across digital and technology-based disciplines require a solution. Politicians and business leaders alike have looked to invest in training to develop the next generation of digital natives, but this doesn’t solve the here and now nor future skills challenges. In my view, the key to solving these issues may be found in outsourcing.

The clear solution to both meeting the skills gap and addressing the paradox between growth and recruitment is accessing the right skills precisely when they are required. This is hardly a mean feat, particularly when client requirements and demand can change weekly as marketing and advertising becomes ever more moment based and reactive.

Critics of outsourcing would argue that it only presents a quick fix at low quality, but it doesn’t have to. The nature of business and the ability for work to be conducted internationally means agencies in North America and Europe can tap into high-skilled developing economies. India, for example, is home to 56% of the global outsource market and is a global digital hub due to a growing high-quality technical community. A significant 20% of graduates from Indian universities major in engineering and related technical subjects, but graphics and design education is also very strong. Whilst more developed economies struggle to hire the right staff, India continues to offer its skills externally.

Outsourcing presents a solution to the agency skills gap as effective models can provide high-quality output, greater flexibility and ease of access to experienced staff. Projects can also be delivered faster as high numbers of staff can be activated quickly. Furthermore, by outsourcing day-to-day creative work, existing agency staff will have more time to focus on delivering more-complex or high-value work, ensuring a much more efficient use of skills at a time when access is limited.

Quality content and campaigns require high-quality skills and outputs, so choosing the correct outsource partner is essential. A key area to consider is return on investment. Agreeing on input, output and results from the outset is very important. Secondly, if you’re planning to transfer work to free agency staff to take on new business, a clear Business Process Outsourcing procedure should be defined from the outset.

In short, a transparent and efficient approach to outsourcing can help to reduce pressure on skills and provide a potential fix to skills-gap challenges and demand for growth. A good recruitment strategy is still essential, but agencies shouldn’t feel tied to recruiters in order to take on new clients. Combined with a positive agency culture and strategy for recruitment, outsourcing presents a means to free up capacity and focus on client growth, retention and ultimately a stronger bottom line.

Robert Berkeley is President of Express KCS, a leading creative production company and longtime IHAF member, that partners with internal and external agencies around the world.

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