Upskill or Outsource? How to Future-Proof Your SME Team

This is Part Two of a Blog Series: The AI Era for SMEs - Survive, Simplify, Scale

Every SME eventually faces the same decision: build capability within your team or buy it in from somewhere else. With AI and automation reshaping the way we work, how you answer that question will directly affect your agility, competitiveness, and ROI.

Outsourcing can look like the fast route, bring in a consultant, buy some software, bolt on a new capability. But quick fixes often come with high costs, long-term dependency, and limited flexibility.

The Hidden Cost: Outsourcing vs Upskilling

Outsourcing may:

• Deliver quick results—but often at a premium cost.
• Create reliance on external providers, making you vulnerable to price hikes or service changes.
• Result in low adoption when internal teams aren’t involved in the design or ownership of new processes.

Upskilling, on the other hand:

• Builds lasting capability and independence within your team.
• Allows you to design workflows that fit your actual operations.
• Empowers your people and boosts retention - 94% of employees say they would stay longer at a company that invests in their development.
• Delivers stronger returns - McKinsey research suggests that organisations that invest in upskilling see 30–50% higher ROI from digital transformation compared with those that rely mainly on outsourcing.

Why Internal Upskilling Wins

• It installs real, repeatable capability, not temporary fixes that vanish when the contract ends.
• It ensures workflows are tailored to your business rather than off-the-shelf.
• It nurtures loyalty - LinkedIn’s Workplace Learning Report found employees are twice as likely to stay when offered internal mobility through upskilling.
• It scales at your pace - training can fit seamlessly around day-to-day work.

It’s practical. Our AI & Automation Bootcamp runs one live session a week, with every task applied to real workflows in your business.

SME Case Study: From Outsourcing to Internal Capability

A 12-person marketing agency in Manchester initially outsourced client reporting to save admin time. It worked, until their provider doubled the price. Instead of paying more, the agency trained two operations staff through a practical AI workflow programme. In just six weeks they:

• Built automated reports using Power Automate and Google Data Studio.
• Reduced report prep time from 12 hours/month to under 2.
• Saved around £18,000 annually in service fees.

The result? They now own the process, the skills, and the ability to adapt without external dependency.

Fresh Industry Insight

• Retention advantage: Organisations that make learning a priority see 32% higher retention and 28% higher employee satisfaction according to UKG.
• Cost benefit: PwC research shows that investing in staff saves roughly 43% compared to letting roles go unfilled, with ROI often realised within six months.

Culture and engagement: McKinsey emphasises that the real power of AI isn’t in the hype, it’s in embedding tools into everyday workflows through skilled, confident teams.

A Perspective from Crispin Read, CEO of The Coders Guild

“Outsourcing your AI strategy is like renting a gym membership and paying someone else to work out for you. It might feel like progress, but it doesn’t build internal strength. When you invest in your team, you don’t just get better results - you build a stronger business.”

FAQs: Building Capability vs Buying It

Isn’t outsourcing quicker? It can be at first if you have an urgent need. But external solutions often bring hidden delays, ongoing costs, and dependency on someone else’s schedule. Upskilling your team means they can act faster and adapt without waiting.

What if we’re already stretched thin? The Bootcamp runs one focused session a week, so it fits around busy schedules. You work on real business processes during the course, so improvements happen as you learn.

We’re not a ‘tech’ company, will this work for us? Yes. The biggest automation wins often happen in non-tech roles like operations, finance, admin, and customer service. We use no-code tools so no technical background is needed.

When will we see ROI? Many SMEs see time and cost savings within six weeks. Even small daily efficiencies can add up to the equivalent of an extra team member over a year.

The Bottom Line

Shiny tools and outside expertise can be useful, but the smartest investment is in your own people. Building capability internally future-proofs your SME, gives you control, and unlocks compounding returns over time.

When you’re ready, check your team’s eligibility for funded places or book a call with us.