Why Recession is The Best Time For Outsourcing Software Development?


As if the last couple of years were not enough to demotivate every business founder, many experts are speculating that we are going through an economic recession. Most businesses stagnate during this period, but you can save yours through the power of outsourcing, which has been a proven method ever since the 2008 recession.

Today, we’re here to explain why the idea of recession outsourcing is highly efficient during current times.

Why Recession Outsourcing Is A Win-Win Deal recession outsource

Benefits of Recession Outsource

Saves A Lot of Costs

When you’re outsourcing, you know exactly what you will spend, giving you a clearer vision of your finances. When cutting costs to keep the company afloat, every penny counts. And when you have a clearer vision of your finances, you can see how effective the idea of leveraging outsourcing is.

Resource Flexibility

In the modern market, businesses must stay competitive without breaking the bank; the same applies to your business. When outsourcing, you have the additional benefit of downscaling your resources when you don’t need them, saving you additional costs.

Also, most outsourcing organizations offer flexible plans when offering services like a dedicated team model or staff augmentation, making the idea more accessible.

Reduced Amount of Burnouts

During tough times, most organizations lay off many employees to cut costs. But doing that means all the responsibilities of those who left are now on the shoulders of the remaining full-time employees.

When people work more than they can, they start getting frequently burned out. The more burned out an employee is; the more error will appear in their work. The small errors add up and ultimately offset the expenses you were trying to save.

More Bang Back For The Buck

During a recession, the currencies tend to depreciate against dollars. This can enable you, the outsourcer, to get more value against your money, mostly from offshore outsourcing.

The saved money can be reinvested into your core business, making money management more efficient.

The Option Is Right There

Virtual work has become more mainstream after the pandemic, and the option to leverage outsourcing service providers is right there for business owners to take. Why not outsource to someone and reduce the cost when the option is there?

How Big Companies Survived The 2008 Recession With Outsourcing

Here is an example of five big companies that continued their economic activity through 2008 with recession outsourcing.


Did you know that every one out of three engineers in Apple is outsourced? Yes, Apple products are engineered globally. Product design, R&D, and marketing take place in the US. The organization believes in investing during downturns, which has kept its business cycle spinning through multiple recessions.


Google has been leveraging outsourcing longer than anyone. And they have multiple reasons behind it.

  • Reducing overall costing
  • Tapping into the global talent pool to select the best of the best
  • To cover in-house employee vacations


IBM increased its efficiency in each department by outsourcing said departments to specialists. During the 2008 financial crisis, IBM signed multiple outsourcing contracts to continue its operations.


Microsoft has survived every economic downfall since its birth and is also nicknamed “The brainchild of the Great Recession of the 1970s. Microsoft has always leveraged outsourcing to keep the company fully operational, and in many cases, its outsourced remote teams complement the in-house teams perfectly.


To cut their costs, Netflix opted for a partner’s infrastructure setting back in 2008, and they unplugged the last of their own data center in 2016. Through outsourcing, they focused more on their R&D, helping them keep their head up through some times of crisis.

5 Steps For Recession Outsource

1. Identify And Support Your Requirements

Many businesses fail despite outsourcing initiatives because they expect their supplier to handle everything. You have to inform your outsourcing provider of what you need, and you must have an idea of specific requirements.

Find clarity in your requirements, and justify the efforts from a financial standpoint of the organization.

2. Define Your Measurement Criteria

You should remember to clarify your measurement criteria when creating your outsourcing requirements. This way, you define clear criteria instead of constantly moving the goalpost. Also, when you define your criteria perfectly, it helps the outsourcing vendor.

3. Compare The Costs

Now that you’ve created a plan, it’s time for a comparative analysis of costs, and you should do this internally and externally. Compare the cost of your internal team to an outsourced one and compare multiple outsourcing vendors and their prices.

4. Choose A Credible Vendor For Outsourcing

Now that everything’s set, it’s time to choose a vendor. But in the modern market, there are many options, and finding a credible vendor who resonates with you and suits your business practices can be tough.

Here are a few factors you should notice when you’re looking to partner with an outsourcing vendor:

  • Review from their clients
  • Portfolio of their past works
  • Quality of work on previous projects
  • Compatibility of the services they provide
  • Pricing models for the services

5. Negotiate & Sign Your Contract

This is the easiest part. Once you find a vendor that meets all your requirements, just negotiate the pricing and sign your contract, and you’re good to go!

To Wrap It All Up

Outsourcing has become a norm in business practices designed to create higher value. No matter the company’s size, if you’re looking to keep your head up with a proper strategy during the recession, the recession outsourcing method can help you do just that.

Looking to outsource your next project? Our professionals at Impala Intech are just one email away!


How Do I Manage Outsourcing Relationships During a Recession?

To manage outsourcing relationships during a recession, establish clear expectations, communicate regularly, monitor performance, and resolve issues promptly.

What Are Some Common Outsourcing Mistakes During a Recession?

Common outsourcing mistakes during a recession include choosing the wrong provider, over-relying on outsourcing, ignoring risks, and failing to communicate effectively.

How Do I Measure the Success of Recession Outsourcing?

To measure the success of recession outsourcing, track metrics such as cost savings, quality improvement, productivity gains, and customer satisfaction.

How Do I Mitigate the Risks of Recession Outsourcing?

To mitigate the risks of recession outsourcing, conduct due diligence, establish clear processes and controls, communicate effectively, and monitor performance.

How Does Recession Outsourcing Affect Innovation?

Recession outsourcing can affect innovation positively or negatively, depending on whether the provider brings new ideas and technologies to the table or simply executes existing processes.