Managing overhead is one of the most difficult aspects of owning and running a business. With competition from fully remote jobs and other sources, many businesses are forced to increase employee salaries, which in turn increases the amount of overhead expenses.
According to The Bureau of Labor Statistics, private sector employee compensation has risen by roughly 4% from the beginning from Q3 2023 to the end of Q2 2024.
However, by outsourcing certain aspects of the business to external companies, these companies can offset rising employee compensation and keep their overhead within a sustainable range. Since we’ve already covered outsourcing HR, let’s look at a few other outsourcing options to reduce company overhead.
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Virtual Private Assistant
If you’re cautious about AI, don’t worry. A virtual private assistant in this context doesn’t involve artificial intelligence. It’s a real human being who completes a variety of tasks according to your needs.
The hiring agency will ask what the VPA’s top five priorities will be (like sorting and responding to emails, compiling reports, overseeing social media, etc.) and match you with the perfect candidate. An assistant can also be hired on a full-time or part-time basis, depending on the amount of work you have for them.
Choosing to hire a virtual assistant India can free up current employees to work on different tasks, streamline and improve file organization, and can often be hired for as little as $10 an hour, significantly less than paying salary plus benefits to an employee.
Outsource Bookkeeping and Payroll
Everyone knows that employee payroll is a major contributor to overhead, but it’s often overlooked that compiling payroll also counts. Outsourcing parts of the payroll or accounting departments to a smaller company can represent significant savings for companies of all sizes.
They can also save companies time and money by handling corporate taxes, regulatory filings, and similar paperwork. According to Indeed, the average salary for an account is just over $64,000 per year or a little over $5,000 per month. A bookkeeping company will almost certainly cost significantly less.
Save Big by Outsourcing IT
Another popular choice for outsourcing is IT due to the large cost savings possible. Instead of paying programmers, coders, cybersecurity personnel, website maintenance, and other miscellaneous IT costs, companies can pay one monthly fee to an outside company and receive the same services at equal or greater quality.
Many IT management companies allow you to pick and choose which services you’d like them to handle, which allows you the freedom to decide. If you enjoy updating the website or are particular about your social media, for example, you could retain those services yourself while outsourcing cybersecurity and software maintenance upgrades.
Outsourcing Customer Service
A great way to save money and create a positive work culture is to outsource customer service functions. Not only will it reduce your overhead, but your employees will no longer have to spend time interacting with dissatisfied customers.
This can include the use of AI chatbots that can answer common customer questions with automated responses or escalate the conversation to a human representative. Companies can also use contact centers, which are the new version of call centers that handle all forms of communication, including email, social media, and more.
Automating Tasks with AI or SaaS Programs
Although automation isn’t typically the first thing that comes to mind when people think of outsourcing, many common business operations can be automated through the use of software-as-a-service (SaaS) platforms. Employees will also be happier as they can avoid these repetitive and occasionally unpleasant tasks.
The exact tasks that can be automated will depend heavily on the nature of your business but can often include data aggregation, simplifying processes, and process improvements. It should be noted that generative AI is very valuable and has many practical applications in business, but it has not yet been perfected. For this reason, all such work should be routinely double-checked by employees for accuracy.
Final Thoughts
According to WorldMetrics.org, companies can reduce their overhead by up to 60% through outsourcing. Of course, nobody knows your business better than you do, and that includes which departments can be outsourced and which are better off remaining in-house.
That being said, even outsourcing one part of your business can result in immediate savings, increased profits, and higher-quality output. It can also boost employee morale by freeing them from having to complete unpopular, time-consuming, or undesirable tasks. Happier employees are generally more productive, which will also boost productivity.
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