Global recession

The corporate world is reeling under the impact of the global recession. The pressure on corporations to deal with the steep rise in inflation rates, exaggerated by two years of COVID-19 related issues, international military conflicts, and lack of sales constrains them to resort to cost cutting techniques. By that means, they start laying-off employees, pruning executives’ salaries, trimming the overhead costs and minimizing the operational costs.  The corporations are trying to make ends meet with marginal human resources, minimal expenditure, boosting sales and saving for rainy days to survive. This situation prevailed in 2008, when the outsourcing came into play to help them tide over the difficult situation. 

A similar kind of situation has dawned in 2023, aggravated by the recent abrupt collapse of Silicon Valley Bank in the U.S. because of bad risk management with the rise in interest rates and uninsured deposits. In the wake of SVB’s collapse, a news report suggests that 186 U.S. Banks are at risk of failure due to similar reasons of rising interest rates and a high proportion of uninsured deposits. The loss of funds compel companies to curtail costs-including legal costs, expenses, and overheads.  The only way to survive for the affected companies during this time is by legal outsourcing. Below is a breakdown of how outsourcing can be the best option during a recession to an affected company:


Increases productivity:

Recession calls for cutting down on costs and reducing the number of employees in the company. This is an important step, as the company needs to keep a watchful eye on the monetary flow of the company as well as the optimal use of its resources. In such a case, hiring offshore located outsourcing vendors   can boost the affected company’s productivity.  Outsourcing basic and small tasks will help the affected company to sustain their operations until financial turnaround takes place. This will ensure that the senior level employees do not have to work on simple or low-value tasks, thereby enabling them to focus on more productive tasks. 



The economic crisis during recession necessitates cost savings for affected companies which brings outsourcing into the picture. Affected companies cannot afford to spend their revenue like they always did when they are financially challenged. At this time, an outsourcing vendor helps the affected company in balancing the financial crisis that they face. By outsourcing the services as and when required to an outsourcing vendor, an affected company sustains itself amid the global economic downturn. Additionally, it eliminates the need to spend on hiring and onboarding a new employee and pay a fixed salary. Instead, the affected companies will only need to pay for the services that they are taking from an outsourcing agency for a particular time. This further helps with the substantial reduction in costs.


Reduces Burn-outs and Errors:

For the affected companies to survive and flourish in recessionary conditions, it is often seen that they lay-off some of their key employees. This affects the workload of the surviving employees and such overburdening of the work results in stress and anxiety, as well as hampering the productivity of the employees. However, by choosing to outsource the tasks of the departed employees, the affected companies can avoid laying-off of key employees and lower the heavy workload assigned to other employees. Furthermore, they can focus on more core activities and perform challenging tasks by outsourcing basic and repetitive process-based tasks.


Gain expertise and knowledge:

The affected companies can outsource some of their work to an external vendor and will pay fees for products or services to an outsourcing vendor, which will also help in cutting down on costs.


Aids in reducing operational costs:

As the recession hits the global economy, the affected companies primarily tend to cut costs and try to save funds as much as they can. Outsourcing some of the work during this time reduces the operational costs. Organizations are free from having to pay for overhead costs such as rent, payrolls, upkeeping of the premises, raw materials and so on. Through this way, affected companies can save up on a lot of expenses and simultaneously get their work done from an outsourcing vendor at an insignificant price. 


Well-designed process:

Many outsourcing vendors are well-adapted to the changing needs of the affected companies and thus have robust technologies that make their clients work easier. With the help of such software, the services or work product gets delivered in the least turnaround time with accurate results. Affected companies dealing with difficulty in managing and proper planning of their business can always choose to outsource their work. By employing an outsourcing vendor well-equipped with the latest technologies and having seamless processes, the affected companies can survive even during recession as they get the best quality output at a very low cost. 

It is evident how the outsourcing industry encouraged the affected companies ‘to stay afloat in the 2008 recession period. Outsourcing helped the affected companies combat the financial meltdown, come back stronger, and survive in the newly changed economic environment. In order to pull through the recent current global economic downturn, it is important to understand and study the greatest impacts the outsourcing concept had on the affected companies during earlier times and optimally make use of the outsourcing vendors in current similar situations. To recap, outsourcing can be one of the smartest business decisions that affected companies can make in financial downturn situations.

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