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Executive in Sweatpants Blog

Freelancing & Outsourcing Tips
Executive in Sweatpants

How to Reduce Rising Employee Costs

Thinking about outsourcing? Download our FREE guide.

Hiring a new employee is expensive…and risky. In fact, for many companies – especially those offering professional services – employee compensation and benefits far outweigh any other expense categories. As you know, you’ve got to cover their base 40 hours, plus healthcare, plus benefits, plus paid time off, along with all the additional taxes and expenses. Not to mention all the training and continuing ed you’re on the hook for. In fact, a recent CNN Money article found that if you hire an employee for $14 per hour, you actually end up spending close to $20 per hour by the time you cover all these extras.

To me – that’s crazy.

Plus, think about all the administrative expenses and opportunity costs just to get the traditional hiring process going. You have to post a job in your local newspaper, attend some job fairs, sort through hundreds of unqualified applicant resumes, and essentially hope you find somebody in your town who will meet your needs.

What Are My Options for Reducing Overhead?

There’s gotta be a better way – right?

Yes, in fact, there is a better way to recruit and staff up – and as you might have guessed, it involves hiring workers through the Internet.

You may not have heard, but literally millions

As featured on the Dave Ramsey Show, listened to by millions of individuals and small business owners each day.

As featured on the Dave Ramsey Show, listened to by millions of individuals and small business owners each day.

of skilled business professionals are working online thanks to marketplaces such as oDesk, Elance, and others. In fact, CNBC recently reported some shocking statistics. According to the Freelancers Union, over 40 million Americans are now freelancing. Why? Well, in many communities it’s tough to find full-time work, so marketing their own skills online is a natural fit. And remember, that’s just people in the United States. There are many millions of additional workers from all over the world, including Mexico, Canada, European countries, India, and many more. These professionals from every corner of the globe are equipped with very highly valuable skills to your business – ranging from website development to accounting to sales and marketing to information technology and beyond.

Benefits of Small Business Outsourcing

So if this is news to you, your brain might already be turning with possibilities. Before we go any further, let’s review the three colossal benefits that your company can begin experiencing by hiring people online.

[Cost Reduction] Perhaps the most obvious benefit of hiring online workers pertains to the significant cost savings for your company. The example I always use involves one of my clients in Los Angeles. To hire a full-time masters-level team member in LA, you’re probably looking at an annual expense of at least $150,000. However, my clients pay me $50 per hour for only the amount of hours they need each week. If a client hired me for 5 hours per week on oDesk, they get me as an on-demand resource for a total annual cost of $12,500, saving them over $100,000 per year off that single hiring decision. In addition, since I’m a freelance contractor, I’m not their employee, so they bypass having to pay me paid time off, health insurance, retirement, workers comp, or even paying payroll taxes on me.

[Quality of Workers] When you hire people locally, there’s a chance you’ll get lucky and find the right person. However, there’s also a chance you’re going to get a generalist who knows some things but still needs a lot of training. When you hire online workers, you start by identifying your need. Let’s say you needed a fully integrated marketing campaign that involves a new website, social media, and email marketing. You could browse through dozens of highly qualified freelancers, hire a marketing consultant to design the plan, and then hire specialists to implement the website, social plan, and build email content. For the price of a single full-time employee, you could have a team of 5 or 10 virtual workers, each of whom offer their own expertise and benefit to your company.

[Flexibility] We live in uncertain economic times. One minute, it looks like we’re pulling out of a recession. The next minute, things get tough. When you have a ton of full-time employees, you have a lot of pressure on your shoulders to keep them busy – and paid. When you hire online workers, there’s an implied understanding with most contractors that you the client have the flexibility to increase or decrease hours based on your needs – whenever you want. So, when things are going well, you can ramp up your budget. When things get tight, you can cut back quickly and protect cash flow.

So let’s summarize – business process outsourcing (BPO) has these distinct advantages to your business:

  • First, it saves you money by allowing you to acquire the exact amount of expertise you need – no more, no less.
  • Second, it allows you to recruit for a specific skillset instead of hiring a bunch of full-time generalists.
  • Finally, it offers flexibility for your business model, thus reducing risk and enhancing free cashflow.

How to Get Started Risk-Free

It’s not difficult to get started. As I’ve alluded to in this session, there are many places you can go and begin hiring online workers. The site I tell most clients about is oDesk. You can click the link below and go there right now to sign up for your free account. However, it may also be beneficial for your company to consider our crash course, “How to Outsource Every Aspect of Your Business.” This web-based, video training course walks you through every step of the online hiring process. Click the blue button below to learn more about our BPO training course.

Click Here to Sign Up for a Free oDesk Account

Get Started for FREE

 

Learn How to Outsource Now

Sure, you could sign up for oDesk and start hiring. But wouldn’t it be nice to have a video-based crash course that tells you exactly what to do (and not to do)? Here’s what you get with our course, “How to Outsource Your Business.”

  • Break Out Sessions: Step-by-step video walk-throughs of the entire outsourcing process
  • Templates that Work: Job posting and interview invitations that will get attention
  • FAQs: We’ve broken our course down into bite-sized chunks (see syllabus below)
  • Unlimited Access: 24-hour, on-demand access to training and course materials
Get the First Session FREE Ready to buy?  Click here to see your options.

 

Training Syllabus

Here’s what we cover in our crash course. As you can see, we cover a ton of material.

Session 1: Getting Started with Outsourcing

  • How do I create my outsourcing account?
  • Where do I set up billing info on oDesk?
  • Why should I set up my company profile?
  • What is the “staff and permissions” tab?
  • What are all those other tabs?
  • How can I change oDesk email notifications?

Session 2: Outsourcing Dashboard Orientation

  • How do I use oDesk and all these buttons?
  • Where do I search for freelancers and workers?
  • Why don’t I see any “open” jobs?
  • Where would I go to post a job using oDesk?
  • Can I view freelancers by category?
  • What are “saved freelancers”?
  • How will I be using the “Manage My Team” tab?
  • What is the oDesk Work Diary?
  • Where will I go to view active contracts?
  • What reports are available to employers?
  • How does oDesk bill my card/bank account?
  • What does the work summary report tell me?
  • What are task codes (now called “activities”)?
  • How do I set up oDesk task codes?
  • Why would I send an email via oDesk?
  • What are notifications and settings?
  • Where can I find free help and support?
  • What is the oDesk help center?
  • How do I issue a support ticket with oDesk?

Session 3: Intro to the Contractor Marketplace

  • Where should I start when hiring on oDesk?
  • How do I view available contractors?
  • How do I search for contractors?
  • Intro to filtering contractors & definitions
  • How do I use categories and subcategories?
  • What does the oDesk feedback rating mean?
  • What should be my strategy for hourly rate?
  • How should I use advanced filtering options?
  • “Independent” vs. “agency” freelancer type?

Session 4: Job Posting Basics

  • Where do I go to post my job?
  • Before I post a job online, what should I do?
  • Which category should I pick?
  • How do I write an intriguing job title?
  • Why should I write an in-depth description?
  • How can I use “skills” to attract good workers?
  • Hourly vs. fixed price contracts?
  • When should I hire someone on a fixed price?
  • What will I need to do to hire someone hourly?
  • How can I filter applicants by experience level?
  • Should I make my job posting public?
  • How can I set preferred qualifications?
  • Should I require a cover letter?
  • How can I use oDesk’s screening questions?

Session 5: How to Post Your First Job

  • What should I actually type in my job posting?
  • What is a good job title and description?
  • Which skills should I select for this job?
  • What screening questions should I use?
  • How do I preview my job posting?
  • Where will my job appear once it is live?

Session 6: Making Your First Hire Online

  • How do I get good people to apply?
  • How can I get to a manageable number?
  • What filters should I use?
  • What to do if I still have too many candidates?
  • How to evaluate an oDesk contractor’s profile
  • What’s an example of a good oDesk profile?
  • How do I set up an interview?
  • What should I say in my interview invitation?
  • How many contractors should I invite?
  • How do I host a virtual interview?
  • What should I do once I’m ready to hire?