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
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.