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When is it Time to Outsource: Key Factors to Determine When You are Ready

All companies are looking for ways to lower their overhead costs. Not some companies. Not most companies. All of them! For many of these companies it is not just a matter of trying to save a buck or two however; it often a question of sheer survival that has them scurrying around shutting off lights, computers or printers that are sitting around idle. If you are a business owner or are just in charge of making the financial decisions, exploring the option of outsourcing might be the answer that you are looking for. How do you know when it is time to consider this choice?


Using Overhead Costs as a Factor
 
Electricity so that they can see and to power the computers, printers and other machines for their jobs.
Heat regardless of the source
Water, not only drinking water but water for toilets and other uses as well
Telecommunications, internet and other assorted costs. 

For the electricity and heating costs you can take your yearly average costs and then divide it by the square footage of your building for a per foot cost. For the other expenses, add and average the amounts and divide by the number of employees. It is financially time to consider outsourcing when:

  • Your overhead costs exceed your budget or projected expense report on a consistent basis and by substantial amounts.
  • Your profit margin has become so razor thin that you can see the bankruptcy lawyer grinning on the other side.

Outsourcing from a Human Resources Standpoint 

Finding good employees can be very difficult at best, but that is not always the major problem for HR. What can be even harder is keeping the existing, exceptional employees once they are found. Constantly hiring and retraining employees slows down production and can cost companies more in lost man hours than working to keep the good employees would. Some of the reasons that employees give for leaving their jobs:

  • The daily commute
  • The hours
  • The expense of child care

Outsourcing gives human resources a wider range of applicants, allowing them to find the best candidate for the job regardless of location. In addition, it can allow the employee that is already working for the company to maintain their position, doing their job tasks from home. 

Finally, the outsourcing option should be considered if the company would like to reduce its carbon footprint. For every job that is done from home by a telecommuting employee, that is equal to savings both for the company and then employee themselves. 

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