As your business grows, so will your needs for additional labor support. The problem is that the traditional model of bringing on more employees as your needs increase can be extremely costly. The biggest cost associated with bringing on additional employees is obviously salary or hourly pay. However, calculating how much additional employees will cost in terms of salary is only one part of the equation. To get a true understanding of what additional labor support will cost you-and why you cannot afford it-you also need to calculate the cost of benefits, overhead, and time commitment that come with new employees. Once you identify all the ways that in-house employees increase your costs you can look into your options for reducing those costs.
One element that continues to drive up the cost of labor support is benefits. Benefits such as employer paid insurance, paid time off, sick leave, and 401k matches have become commonplace in many industries. High quality employees have come to expect robust and unique benefits packages. It is a way for businesses to attract and retain top talent. But, these benefits can come at a high cost for employers. If the cost of providing benefits to additional employees makes it unaffordable then it is time to rethink your hiring model.
Beyond benefits there are other types of overhead that come with hiring additional labor support. Providing in-house employees with physical space to work is another element that uses up financial resources. In addition, you likely spend money providing them with the tools and supplies they need to complete their work. Integrating a significant number of new people to your labor force will also require you to expand your infrastructure over time and result in an increase in overhead that is recurring month to month.
Bringing on additional in-house labor support can cost you in terms of your time. The process of hiring, training, and supervising additional labor can demand a lot of your time and energy. If these tasks take you away from other important elements of your job, it can become very costly. You may be paying a high opportunity cost by neglecting tasks that could lead to growth because you are consumed with fulfilling your current labor support needs.
Alternative labor sources
Looking into alternative labor sources can reduce some of the costs related to hiring additional employees. For example, you can avoid paying for benefits such as paid time off when you use contingent labor such as freelancers, temporary workers, and outsourcers. Using remote labor such as an outsourcing agency will eliminate the costs related to providing tools and infrastructure. The outsourcing company will already have the tools and infrastructure in place needed by their employees to accomplish their tasks. Outsourcing will also reduce the amount of time you have to spend on hiring and training because they handle the majority of the hiring and training needed.
Bringing on the additional labor support you need for your business can be a costly and complicated project. If your normal way of doing things has become too expensive, then it's time to look into alternatives. You have a number of alternative options including freelance workers, temporary labor, and outsourcing. Using one or a combination of these options can help you find the additional labor support you need at a cost you can afford.