As the cost of qualified labor continues to increase, many business owners feel overwhelmed and stuck. The U.S. Bureau of Labor Statistics found that labor costs in the private sector related to wages and salaries increased by 2.8% over the last 12-month period. In addition, the cost of benefits for that same 12-month period increased by 2.3%. These percentages may seem small to the average person, but as a business owner, you are acutely aware of the impact these increases can have on your business when margins are already slim. These numbers can make it seem like there is no way to get the level of help you need without significantly sacrificing profitability and/or growth. Fortunately, you have options for reducing the cost of labor so you can continue to grow and maximize profitability. Some ways of combating this issue include assigning new growth related tasks to current employees, hiring temporary labor to fill the gaps, and getting the help of an outsourcing company.
Assign new tasks to current employees
The process of hiring and training new employees is expensive. In order to avoid these costs, some business owners delay hiring new people for as long as possible. One way to delay bringing on additional help is to assign the new tasks related to growth to current employees. The obvious benefit to this method is that you will avoid the costs associated with hiring and training. However, there are some potential risks associated with this method. You risk burnout in your current employees by perpetually adding more work to their load. Ultimately, you may find that delegating responsibilities in this way is more costly because you are paying your key people to do tasks that could be done at a less expensive rate by someone else. As a temporary solution to deal with sudden growth, this method could work. But, assigning new tasks to current employees is not a sustainable long-term solution.
Hire temporary labor to fill the gaps
Growth in your business does not always happen in a predictable manner which makes it difficult to decide when to hire on new, full-time help. You do not want to hire too soon and pay someone for full-time work when you do not have enough to keep them consistently busy. In order to get qualified part-time help quickly, some business owners look to temporary employment agencies. You can typically find highly qualified labor candidates at a temporary employment agency that caters to professionals. The setup for using temporary employees varies between agencies but you can usually save on some of the initial costs related to on-boarding a permanent employee. In addition, temp agencies can send you more or less help as your needs change. There are two big disadvantages to using temporary labor. First, you will have to spend time training each new person that comes to work. Second, there is often a high turnover rate at temporary staffing agencies as people move on to full-time employment. This factor means that you will likely spend a larger percentage of your time training newcomers. Using temporary labor to fill the gaps as your business grows is a model that can work in the short run but may become time-consuming over the long term.
Get the help of an outsourcing company
Another method for reducing labor costs is to work with an outsourcing company. A high-quality outsourcing company can provide you with trained and qualified labor-often at a fraction of the cost you would spend on hiring, training, and employing full-time help. If you are in a place where your needs for labor fluctuate then outsourcing is a great option. As your needs grow, the outsourcing company will handle the hiring and training of the additional people needed for your tasks. This will save you the time and expense that comes with interviewing, hiring, and training new people every time your business expands. Some business owners hesitate to use outsourcing because of the geographical separation. However, the physical separation can be easily overcome with the aid of technology that is designed to help teams collaborate in real time over any distance.
The ever-increasing cost of labor does not have to cause the growth of your business to stagnate. The options mentioned here can help you find affordable labor solutions as your business expands. Delegating new responsibilities to current employees and working with temporary labor are both viable short-term solutions for affordable labor. However, if you want a long-term solution, look into outsourcing options like those offered by Infinit-O. Through outsourcing, you can reduce the cost of labor and get the specialized help you need for your business.