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Phil from accounting is in your office once again, whining because he is fielding calls for Janice from HR. It seems that she routed calls to Phil because she is busy compiling the data for a marketing report because Doug and Dave are off handling the Jones’ meeting. Wait, weren’t you the one scheduled to go to that meeting? Why didn’t your secretary tell you that? Apparently your company is in chaos and you need to take a giant step backwards and figure out what is going on: you need to sit down with your business plan and figure out who should be doing what and when. Otherwise, there is no sense in having divisions and departments at all.

 
Define the Departments and their Duties
 
It sounds so simple that it should not even need to be said, but it is still a forgotten concept: define what the departments are and what their main objectives are: HR handles personnel, including hiring, firing and finding insurance plans. They should be in charge of enrichment and training as well as making sure that everyone’s licenses or certifications are up to date. Sales handle sales, Phil and the rest of the accounting department make sure that all of the numbers for the company and its accounts are all in order and so on. The smaller your company is however, the smaller the number of departments that you will need.

Establish a Chain of Command in the Department
 
After the departments are defined and the tasks all meted out, it is time for the real division of labor to get started. Companies that utilize an organizational chart that shows everyone and their place in the hierarchy get more things accomplished with less of the problems than companies that do not. Each department should have a department head and if it is larger than five or six people, an assistant department had. Those within the department should come to the department head with problems- eliminating the problem of problems being brought to the CEO or company leader especially if it is a problem that is easily solved by someone in the department. Set clear and enforceable rules about using the chain of command- those who do not follow the procedure should be reprimanded, in writing so that the system can work.

Set Clear Cut Goals for the Departments
 
Each department has their division of power in place. They know what their job duties all are. Now they need to get to those tasks and accomplish the goals that are set forth for them. The goals should be tangible, clearly stated and should involve a reward of some kind (within budget of course). There is no one division that is better or more necessary than another – the company is not a collection of divided sectors and departments and that should be reflected in the organizational chart as well. Each department handles their own tasks but they must work together so that the company can succeed. 

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.