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The Pros and Cons of Third-Party Service Outsourcing

For many people, the term "outsourcing" evokes a negative response. After all, it used to mean abandoning quality in pursuit of a lower bottom line. Today, 27% of all service technicians in the U.S. are third-party workers, indicating that outsourcing is no longer a dirty word in the field services industry.

Third-party outsourcing is a crucial part of managing a blended workforce that can handle your clients’ evolving needs. As the name implies, a blended workforce includes a blend of full-time and temporary employees, independent contractors, and skilled freelance workers.

Like most things, though, sourcing talent externally has its pros and cons. Here are some things to consider when it comes to third-party service outsourcing.

PRO: Customer-Centric Service Approach

Customers want to know that their field service provider is laser-focused on their needs. Outsourcing is one way to offer unique, niche services that show your company is in tune with evolving client needs and industry trends. 

A blended workforce, including third-party workers, makes it possible to increase your availability for repairs and to service a larger geographic area, giving a big boost to customer satisfaction overall. Geographic coverage becomes especially important when client demand changes due to a natural disaster or seasonal peak.

In addition, the enhanced technical expertise gained through third-party outsourcing can help to expand the organization’s service portfolio.

CON: Quality Control

A third-party workforce is only a good thing if clients continue to receive the quality they expect. 

SOLUTION: Use workforce management software to send regular customer satisfaction surveys to elicit feedback from your clients. Customizing surveys with your logo and branding can help boost response rates so that you receive accurate performance data for third-party workers.

Workforce management software can also be used to gather and record accurate education and job history, industry certifications, and licenses for independent contractors. When you have a standardized approach to comparing freelancers’ technical knowledge and repair skills, it becomes easier to maintain the quality your customers expect. 

Customers will also benefit from the schedule optimization that a workforce management solution offers. Optimization ensures that the technician, most qualified for the job, is dispatched within the least amount of time and for the least cost to the customer. 

PRO: Less Hiring

While there is no doubt that having the right people in place is crucial to your organization's success, finding and hiring new talent can be expensive and time-consuming. Not to mention organizations across the country are experiencing record-high turnover rates, most likely due to the COVID-19 pandemic.

Third-party outsourcing can help lessen the impact of declining employee retention rates, especially when critical onboarding initiatives are in place. 

For more thoughts on emerging from the pandemic as a stronger company, download ServicePower’s POST COVID-19 Playbook for Services Businesses.

If your organization does not already have established third-party relationships, ServicePower manages a Premier Contractor Network of more than 4,000 independent servicers ready to be dispatched to fulfill your repair jobs. The ServicePower team includes a group of recruiters using sophisticated mapping technology to find the best available technicians to improve your overall network.

CON: Communication Challenges

Historically, communication with third-party workers is one of the biggest outsourcing challenges for service providers. 

SOLUTION: Implementing a customer portal can help bridge the communication gap between your customers and third-party contractors. You can embed the portal on your existing company website or host a separate branded site. Customers using the portal can interact with technicians, make new service appointments, and see the job, asset, and activity history 24 hours a day. 

The portal also makes proactive communication effortless by automating customer notifications and email responses, job status updates, and technician location tracking. These features are especially helpful when managing a mobile workforce because they foster transparency surrounding the client experience.

PRO: Increased Competitive Edge

A blended workforce brings the addition of skilled on-demand talent and an expanded geographic reach that will improve your company's position in the marketplace. By leveraging third-party outsourcing, companies also better utilize resources and reduce overhead, both of which increase operational efficiencies to lower the overall cost of service. But to truly maximize outsourcing’s benefits, invest in technology that matches contractor credentials and availability with the right clients.

With business rules and configurable logic, you can automatically determine a technician’s eligibility for specific jobs as well as their unique ranking within your workforce. And with the implementation of a customer portal, this information is easily made available to your clients, which once again increases customer satisfaction. 

CON: Security and Safety Risks

Many organizations are hesitant at first to use third-party contractors because customer safety is paramount to success in the field-services industry.

SOLUTION: Although managing the credentials of third-party workers can be a challenge, ultimately, comprehensive credentialing reduces risk. Workforce management software can be used for criminal background checks and drug and health screenings. A thorough vetting process provides reassurance that all potential service providers, even third-party contractors, have had the necessary background checks required to undertake work with their customers safely.

It is also important to know that third-party workers are covered by adequate 1099 contractors' insurance. Companies should periodically perform compliance checks for proof of general liability and other insurances. This knowledge will help to ensure that your insurance requirements and mandates are in accordance with industry regulations.

Summary

Referring a client to other reputable vendors used to be the mark of excellent customer service.   Today that is the baseline of what your customers expect. Clients are looking for their field service provider to be a 24/7 support system and knowledge bank. With a blended mobile workforce, it is possible to exceed your customers' expectations. However, successfully managing third-party workers requires intelligent field service management software. 

The most successful field service providers use cutting-edge technology to leverage communication with clients and contractors, optimized scheduling, and automated processes for finding and securing the right talent. The result is a seamless and much-improved customer experience.

The Bottom Line: Third-party outsourcing is not going anywhere. It is estimated that nearly 162 million people or 20% to 30% of the working population (E.U. and U.S. combined) already work independently. 

Field service providers will continue to rely on a third-party workforce to ensure their clients get the customer-centric experience that’s required for a field service company to stay competitive. 

ServicePower offers a suite of products to help companies tackle the workforce management challenges of third-party outsourcing. Discover what solutions are possible for your organization with a custom demo

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