7 Reasons Why Outsourcing Is the Secret Weapon of Startups

In the ever-changing world of startups, it is important not only to be flexible and support innovation, but also to overcome specific obstacles associated with managing a new emerging business. As a result, startups from various industries are increasingly considering IT outsourcing as a strategic solution. 

The appeal of full-time positions has declined. By the end of 2024, up to 28% of American business leaders preferred to outsource IT talent. It is not just a plan B or a way to reduce costs, but a catalyst that frees up teams, supports strategic brand growth, and accelerates market expansion.

Andres Zunino of ZirconTech also emphasises that great results can be achieved through the collaboration of internal and external workforces. This hybrid model allows you to get the best of both worlds. When aligned, he says, it leads to fast, cost-effective, and innovative solutions.

This is confirmed by the experience of CuriosityStream, which hired six skilled programmers to develop a new feature for its streaming platform. Andre Silva, the company’s chief technology officer, recognised the potential of such synergy and, in an effort to optimise operational efficiency, pushed for external teams to collaborate with internal staff.

It is no surprise that, according to a survey by Clutch, as many as 37% of small businesses began outsourcing at least one critical business function in 2019, with 52% planning to do so in the following year.

But how exactly does outsourcing help startups compete with big players in the market?

It provides them with superpowers

Companies specialising in IT talent outsourcing give startups access to specialised skills and knowledge that they lack. They can help them make strategic decisions, avoid the risk of failure, and maintain a competitive advantage in the market. Even GitHub outsourced key backend activities at the beginning of its operations. It achieved success thanks to the expertise of a hired Get specialist, Scott Chacon.

It complements small startups

Since the market is unpredictable, many startups appreciate being able to change the size of their teams depending on current needs. One example is Google, which uses the outsourcing of top IT talent to replace internal staff when they go on parental leave. Another scenario where flexibility can come in handy is during the annual holiday seasons.

Enables strategic investments

“Outsourcing IT saves companies capital that can be invested in other aspects of the business,” suggests Sarah Goffman of TCE Communications, Inc. You have to pay internal employees for training, benefits, social security, health insurance, and vacation time. With outsourcing, however, you only pay for the services provided on an hourly basis. If you prefer remote collaboration, you don’t pay the freelancer for technical equipment, travel, or meal expenses.

Startups with limited budgets particularly appreciate this beneficial model. Hiring external reinforcements also saves them the costs of HR activities. But beware: even though outsourcing can bring significant savings, choosing the cheapest provider of IT specialists does not pay off – always take into account the quality, coverage, and reliability of the company.

Protects startups from burnout

If you are concerned about high staff turnover, your IT team is constantly overloaded, or you feel that you are lagging in the market, it is high time to get experienced help. “As an IT professional, you have to keep a lot of things in mind. If you are responsible for too many tasks, you will not be able to handle the complexities of this field,” warns Thomas Griffin of OptinMonster. However, if IT freelancers take on part of the workload, startup representatives can once again focus on their core competencies, which they do best. This will not only increase the brand’s efficiency and innovation, but also its growth.

Improves IT systems

According to Mani Padisetti from Digital Armour, startups should outsource IT specialists in the following scenarios: if the uptime of key systems or their reliability does not meet acceptable internal standards, if there is a lack of insight into IT operations or when users are dissatisfied with the technology (even after internal attempts to remedy the situation). Even the team that launched Slack realised this. Since the previous prototype did not appeal to people, Slack decided to entrust the design of its application and website to external contractors. They created a visually appealing and user-friendly interface that customers around the world fell in love with.

It helps them meet deadlines

Recruitment processes for developer positions are currently extremely time-consuming, especially for startups with limited resources and stressful deadlines. Up to 68% of companies need at least one month to recruit a programmer. It should also be considered that, according to a survey conducted by Commit USA, on average, 20% of new employees need to be replaced, which makes these investments a loss. By outsourcing these roles, you can significantly speed up product launches while reducing the risk of additional costs and delays.

Reduces the technical debt of startups

Approximately 40% of large companies’ budgets go toward expenses related to technical debt. This makes it all the more important for startups to develop a strategy to address it. If they decide to implement innovations with the help of hired IT specialists, they will gain a competitive advantage in the market.