Why Outsourcing is the Answer in a COVID-19 World

Why Outsourcing is the Answer in a COVID-19 World 

The business world has and continues to evolve and adapt throughout the years. However, the world’s economy was tested over the past four months due to the global pandemic, COVID-19.  Business owners, both small to large, were faced with the decision to transition to a virtual platform.  Even with the changes looming, businesses needed to revisit their P&L and trim expenses to make ends meet.

What expenses do you cut?  Are those expenses job duties? Are those expenses key technology platforms that increase efficiency? Regardless of what decisions were made there are options for business owners.  The first option to review is outsourcing specific roles and responsibilities.   

TIP: Outsourcing is the process of hiring another company, or qualified person, to handle business activities on your behalf.

 Why should you consider outsourcing?

Skilled Resources Without Training Expenses – According to the Training Industry Report, companies spend an average of $1,200+ per employee for training.  Honestly, I see that number doubled in most of my clients when you add in the time you take away from other employees assisting with the onboarding process.   By utilizing an outsourced firm, you omit the training expense completely.  

TIP: As you interview outsourced companies, be sure to ask for testimonials and references.   In addition, asking for a portfolio is also quite common.  Do not forget to do your due diligence.

• 20 Hour Work Week vs 40 Hour Work Week – Who says your business needs cannot be accomplished in twenty hours a week vs forty hours a week?  Ask yourself this, if you position someone in a role that has the experience and knows how to complete their work accurately and efficiently, would you be excited?  Yes, of course!  Outsourced roles are completed faster and at a higher efficiency rate.  It is the one role/job function they do every day, they have perfected the trade.  This right here saves you almost half, if not more, of an annual salary for an employee.  

TIP: Does your business experience seasonal fluctuations in the work force?  If so, consider outsourcing.  You are only paying for work when work is needed. 

• Geographical Wage Differences – Consider, the average annual salary of a Marketing Director in New York City is $101,823 and the average annual salary of the same position in Birmingham, Alabama is closer to $72,000.  That is close to a $30,000 difference.   If you work in an area that has high wage premiums, consider looking elsewhere for outsourced services. All outsourced firms operate on a virtual platform enabling operations to continue with zero geographical limitations.  Is your business located in New York City and looking for an outsourced bookkeeper? Check out ShoreSource Business Solutions in Charleston, South Carolina!  It works, we promise!
• Increased Taxes – By hiring a new employee, the business owner is taking on a handful of employment tax additions. Have you considered the increase in the following taxes?
• Employers withhold federal and state income tax from employees’ wages.
• Employers withhold part of Social Security and Medicare (known as FICA) taxes from employees’ wages and pay a matching amount.
• Employers typically pay federal and state unemployment insurance (FUTA) tax. 
• Employers pay into state disability programs.
• Excises Tax – dependent upon industry and job duties (i.e. need for specific tools or large equipment qualify as a business that would pay excises tax.)

Again, working with an outsourced firm enables you to omit these increased financial obligations. 

Interested in learning more about ShoreSource Business Solutions, LLC?  Feel free to reach us at 843.729.2961 or info@shoresourcebiz.com.