As early-growth and middle-market companies navigate today’s economic uncertainty, staying competitive and scaling while managing costs is more crucial than ever.
Led by Tony Esposito, Managing Director, Consero hosted a panel of leaders from various sectors including IT, HR, sales/marketing, and finance, to explore how outsourcing can unlock growth and operational efficiency, particularly for private equity-backed and growth companies.
Roundtable Panelists:
- Slade Kobran, Managing Partner, Chief Outsiders
- Linda Blackmon, CEO, ExtendMyTeam
- Chris Caprio, CEO, Focus Technology
Here are the top reasons why outsourcing should be a priority for C-suite executives in 2025.
1. Addressing the Talent Gap in Key Roles
Outsourcing allows companies to access high-quality talent for key roles like CFO that might otherwise be unavailable or cost-prohibitive to maintain in-house, particularly in competitive job markets, and without the financial strain of full-time hires.
While full-time C-suite salaries aren’t always feasible for growing companies, outsourcing fractional leadership roles as needed provides cost-effective expertise.
“The outsourced model allows (growing businesses) to access talent they couldn’t otherwise and move much more quickly by having the experience of folks who’ve done this before,” notes Slade Kobran.
Key Benefits:
- Access to Specialized Expertise: Outsourcing allows businesses to access top talent that might be difficult to hire full-time, especially in non-major cities.
- Cost Efficiency: The fractional or part-time model enables companies to afford high-caliber talent without the full-time cost burden.
- Experienced Leadership: Outsourced providers bring experienced operators who have built multiple revenue engines, providing valuable insights and strategic guidance.
2. Improving Employee Retention and Engagement
At high growth companies, certain functions like finance and accounting tend to have higher turnover rates. Employee retention remains a critical challenge, and outsourcing can help organizations create compelling value propositions for their workforce.
“It’s not just to finance and accounting departments…we see those turnover rates in other departments as well,” says Linda Blackmon.
“In year one, an employee really might be attracted to you and what you’re doing. It’s a new role and you definitely want to keep them there. You do that by creating some kind of value proposition for your employee.”
Key Benefits:
- Enhancing Employee Value Proposition: HR and recruiting solutions can help companies retain talent beyond the first year by offering access to specialized training and development opportunities.
- Relieving Workload Pressures: Outsourcing ensures that lean internal teams aren’t overburdened during absences or transitions.
- Strategic Talent Allocation: Companies can focus internal resources on core activities while outsourcing specialized functions.
3. Enhanced Strategic Focus and Agility
Private equity-backed companies increasingly rely on outsourcing to drive transformational growth and achieve scalable, efficient operations at their portcos.
“Private equity sponsors aren’t looking for incremental growth; they’re looking to transform businesses for capital-efficient, scalable growth,” noted Tony Esposito.
Outsourcing enables businesses to scale operations up or down depending on their needs, maintaining a competitive edge in a rapidly evolving business landscape.
“Being able to have outsourced or fractional support who have been in these scenarios several times can help them prioritize very effectively.”
Key Benefits:
- Strategic Growth: Outsourced providers free organizations to maintain an agile focus on transformational growth opportunities, like rollups and acquisitions, rather than incremental improvements.
- Business Continuity: Outsourcing ensures that businesses have the necessary resources and expertise to continue operations smoothly, even during uncertain times.
- Efficient, Flexible Scaling: Firms can scale resources up or down as needed, and hire only for specific expertise or projects, to rapidly deploy resources to meet strategic objectives.
4. Mitigating Compliance and Technology Risks
Outsourcing partners help companies stay compliant with complex regulations and address evolving technological challenges without hurting enterprise value.
For example, outsourcing IT services in areas like cybersecurity helps businesses stay secure and operational around the clock, while an HR partner can help maintain compliance with laws across different states.
“If you’re an organization that’s doing something else… it’s extremely difficult to put together a W2 workforce to be able to support (IT needs) when you’re a small or middle-market company,” says Chris Caprio.
Key Benefits:
- Regulatory Expertise: HR outsourcing ensures compliance with ever-changing laws across states and industries.
- Cybersecurity and IT Resilience: IT outsourcing strengthens cybersecurity, ensures compliance, and maintains business continuity.
- Technology Expertise: Outsourcing provides small businesses the bandwidth to stay updated with the latest technology trends such as advanced AI, cybersecurity, and cloud computing solutions.
- Compliance and Advisory: Outsourced providers offer strategic guidance and 24/7 support for mission-critical systems.
5. Leveraging AI and Emerging Technologies
Outsourcing partners provide small businesses the bandwidth to stay updated with the latest technology trends such as advanced AI, cybersecurity, and cloud computing solutions.
In particular, the rapid rise of AI is transforming business operations, from financial planning & analysis to help desks, but the technology is cost-prohibitive to develop and maintain in-house. Instead of falling behind, smaller businesses can tap into outsourcing partners for a cost-effective way to integrate this technology effectively.
“Don’t get hit by the wave; grab your surfboard, jump on top of the wave, and join the fun,” recommends Chris Caprio.
Key Benefits:
- Digital Engineering Talent: Outsourcing digital engineering talent can result in lower costs, while ensuring effective implementation.
- Strategic Planning: Outsourcing partners provide strategic guidance on the business case for AI and how to maximize the ROI of its investment.
- Reduced Costs With AI Solutions: In areas such as customer support.
Outsourcing: The Key to 2025 Success
As businesses navigate economic uncertainty and rising competitive pressures, outsourcing offers a powerful solution to enhance expertise, scalability, efficiency, and compliance.
The right outsourcing partner will likely be equally invested in your success, because as Chris Caprio noted, “we’re auditioning everyday to show that we have a command of your business and that we’re really adding value.”
By planning ahead and exploring potential partnerships now, C-suite leaders can position their organizations for success in 2025 and beyond.
For those seeking a finance and accounting partner, Consero offers a suite of AI-enabled and tailored solutions to provide the exact support you need, when you need it. Get in touch to learn more.
