How You Know It’s Time to Outsource Your Back Office Operations
As the owner of a small or mid-sized staffing agency, you probably think that outsourcing is just too expensive right now. You figure it’s not too difficult to update employee records in QuickBooks, manage payroll for a handful of temps, and handle human resources on your own. But as your company grows, so will these responsibilities. They’ll become increasingly more complex and time consuming to manage in-house.
You might be surprised to hear that smaller operations are actually the best candidates for outsourcing and the ones that can benefit the most from the services offered by back office service providers. They can reduce your costs, drive efficiencies, and provide myriad other advantages that will help you run your business in a smarter, more streamlined and effective manner.
Is it time for you to outsource your backroom operations? Here are some of the things that indicate it’s time.
Your Agency Is Quickly Growing
The life of a small staffing firm owner is exciting. Booms in business, thanks to the rise of the contingent worker, allow you to grow your business faster than you expected. But this increase in business comes with operational constraints. You’ll have to onboard more workers, pay a larger temporary workforce, and manage new risks. The bigger your business gets, the more time consuming, complex, and risky it’s going to get for you to manage your back office on your own. If you’re experiencing exponential growth or see it in your near future, it’s time to outsource your backroom operations.
The technology you invested in when you started your business might not be aligned with where your company is now. Your technology might not always scale to growth. As your needs become more complex, off-the-shelf small business accounting software and HR systems just won’t provide sufficient returns anymore. In fact, they might hinder your operations instead. If you’ve outgrown your technology, it might be time to outsource your backroom operations instead of investing in expensive new software that you’ll have to spend additional time learning.
You’re Making Costly Mistakes
One of the most significant benefits you get when you outsource your backroom operations is accuracy. Whether you’re making payroll mistakes due to miscalculations, making misclassification errors while onboarding employees, making errors when it comes to legislative compliance, or making HR mistakes while managing your workforce, the consequences can be costly and severe. These mistakes can lead to losses, fines, penalties, a bad reputation, and loss of employee trust.
When you outsource, you get a guarantee that if any errors occur, the onus isn’t on you—it’s on the back office service provider. And the provider will be the one who will correct the errors and pay the penalties provided that you supplied the accurate information. Don’t worry though, because these mistakes rarely occur thanks to the service provider’s experience and expertise.
You’re Losing Focus
As we’ve mentioned above, handling back office tasks can become incredibly time consuming. While you’re trying to manage them as best you can, you’re likely neglecting your core business activities that drive growth and profits. If you’re losing focus on your core business because you’re spending the majority of your time on HR, payroll, and compliance, it’s time to outsource your backroom operations so you can get back to the work that matters.
You Want to Reduce Overhead
Just about every business in the world is trying to reduce overhead expenses in order to have the cash flow needed to invest in more important business activities and stay competitive. Outsourcing your back office work is an excellent solution. Though you will pay a fee to the back office service provider, the cost of that fee is minimal compared to the costs of hiring a payroll clerk, buying equipment and supplies, investing in software, paying fines and penalties from non-compliance, and having the necessary square footage to perform all of your back-office functions in-house.