Blog: Outsourcing is key to success, says accountancy firm Hall Morrice

Aberdeen is often described by those who live there as a ‘big village’, where everyone knows everyone.

Despite being Scotland’s third largest city, there is an undeniable feeling that Aberdeen is the Caledonian equivalent of Cheers: the city where everybody knows your name.

And so it seems that everyone in Aberdeen knows someone whose job has been affected by the downturn in the oil and gas industry. Whether they have lost their job or faced a corporate restructure, the fluctuations in oil prices have affected thousands of people across the city.

Research published at the tail end of 2015 suggested that a further 35,000 jobs would be lost in the North Sea oil and gas industry by 2020, with many of those in the Aberdeen area. Recent reports confirm this, claiming that all UK-based oil and gas firms are considering further job cuts.

So what does this mean for businesses that are not directly involved in the energy industry? Companies of all sizes in all sectors have noticed a knock-on effect. From professional services to hairdressers, restaurateurs to cleaners – everyone is feeling the pinch, and looking for ways to keep outgoings to a minimum.

As companies downsize, and employees face redundancy, business owners must tackle increasingly complex challenges. Despite smaller workforces, there are vital tasks which are required to keep businesses afloat – and fewer employees to undertake them.

Jobs are often passed on from highly skilled staff to employees who do not necessarily have the relevant skill set or training to complete them, costing businesses not only money but their most valuable asset of all: time.

But in this period of economic depression, what other options do businesses in the north east have?

Derek Mair, partner at Aberdeen-based independent accountancy firm Hall Morrice, believes that outsourcing key operations is the answer to maintaining a high standard of work and remaining compliant with industry regulations.

By bringing in specialists, he says, companies can focus their efforts on providing customers and clients with the best possible service.

Mr Mair continues, “There has been a noticeable shift in the way businesses are operating in Aberdeen since the oil and gas downturn began. With budgets tighter than ever, companies are rightly looking at the best ways to keep their costs low.

“While at first it may seem that outsourcing tasks such as management accounts and payroll is an additional expense, in the long run it can save businesses a considerable sum.

“Following job losses, managers face two options: recruit new skilled staff or share the workload across the remaining team. In many cases, they will pass on tasks to employees who have no previous experience in a given role. This leads to prolonged periods where jobs are not carried out in the most efficient manner.

“Mistakes can be made, and this is costly to the business. The extra time taken by the employee takes them away from their regular work, and the added pressure can also prove to be very disruptive.

“By outsourcing specialist roles to a firm with a good reputation, business owners and managers can have the peace of mind that the work is being undertaken in the correct manner.

“These tasks can be undertaken quickly and efficiently – saving time and money, and reducing the likelihood of mistakes occurring. These specialists will be well-versed in their topics of expertise, and will ensure that companies are complying with all relevant legislation and regulations.”

By outsourcing tasks like payroll, small businesses can drastically cut their overheads. By eliminating the cost of accounting software and specialised IT support, businesses can make considerable savings which can then be used in other areas, such as business development, which may lead to more revenue being generated.

“Outsourcing tasks allows business owners to more carefully control their outgoings,” says Derek. “By bringing in specialists in areas like financial services, there is no need to pay overtime in busy periods. Likewise, there is no time wasted during quiet spells. Services are flexible to a business’ needs, and can be adjusted depending on the volume of work required.

“In smaller businesses especially, outsourcing administrative tasks allows staff to concentrate on retaining current clients, and building relationships with new prospects at a time when bringing in fresh business is more critical than ever before.”

Founded in 1976, Hall Morrice has offices in Aberdeen and Fraserburgh.