Outsourcing

How much does an actually employee cost?

It is easy to dismiss outsourcing your bookkeeping and payroll functions purely on the cost. However have you really considered how much an employee costs?

Before embarking on hiring an employee consider the list below.

• Recruiting Expenses
• Basic Salary
• Tax & NIC
• Pension
• Benefits, i.e. company car, health insurance
• Office space
• IT Equipment & Software
• Training
• Holiday & SSP

Benefits of Outsourcing

Reduce labour costs. Hiring and training staff for short-term projects can be very expensive, and temporary employees don't always live up to your expectations. Outsourcing lets you focus your human resources where you need them most.

Focus on your core business. Every business has limited resources, and every manager has limited time and attention. Outsourcing can help your business to shift its focus from peripheral activities toward work that serves the customer and it can help managers set their priorities more clearly.

Control capital costs. Cost-cutting may not be the only reason to outsource, but it's certainly a major factor. Outsourcing converts fixed costs into variable costs, releases capital for investment elsewhere in your business and allows you to avoid large expenditures in the early stages of your business. Outsourcing can also make your firm more attractive to investors, since you're able to pump more capital directly into revenue-producing activities.

 Increase efficiency. Companies that do everything themselves have much higher research, development, marketing, and distribution expenses, all of which must be passed on to customers. An outside provider's cost structure and economy of scale can give your firm an important competitive advantage.

Start new projects quickly. A good outsourcing firm has the resources to start a project right away. Handling the same project in-house might involve taking weeks or months to hire the right people, train them, and provide the support they need. And if a project requires major capital investments the startup process can be even more difficult.

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