Top 3 Tips for Minimizing Labor Overhead Costs

Posted by Infinit-O on Jun 4, 2018 6:32:38 AM

Topics: Outsourcing, Overhead Costs

Top 3 Tips for Minimizing Labor Overhead Costs | Infinit-O

Labor overhead costs can significantly eat away at the profit margins of your business. If your company is growing quickly it can seem extremely difficult to get the amount of help you need without increasing labor costs exponentially. If you find yourself in this situation you are likely looking for ways to minimize your labor overhead costs without stalling the growth of your business. You can start by looking for ways to streamline your business processes. As you take a close look at how things are being done at your company you can also identify areas where you can outsource and automate certain processes. Implementing these three tips will help you get started on the process of minimizing labor overhead costs-even as your business grows.


Is there an area or areas of your business that you know could be streamlined? Have you noticed a pattern of inefficiencies that need to be addressed? These inefficiencies can cause labor costs to balloon when you have more people than necessary working on a task or project. It can be easy to put off dealing with inefficiencies when you are trying to keep up with growth in your business. Over time, ignoring these problem areas can cost you a lot of money. If you can find the time to streamline the areas of your business that need it you will most likely be able to reduce some of your labor overhead costs.


As you're working on streamlining the different areas of your business you will likely find that there are tasks that can be outsourced. For example, you can outsource routine processes such as accounting, data entry, tech support, and even customer service. A top notch outsourcing agency can provide you with high quality labor support for much less than you would pay to for in-house. Outsourced labor generally costs less than in-house labor and you also cut out other costs related to hiring additional employees. Some of these other costs include your own time spent hiring, training, and supervising, along with physical purchases such as office space and supplies.

The structure used in outsourcing means that you only have to spend a minimal amount of time training or supervising. The model that the best outsourcing agencies use is one where they handle the bulk of the training and supervising that needs to be done. The time and money you save by outsourcing can translate into a significant decrease in your overhead labor costs.


If you have been slow to embrace the idea of automation in your business, it could be affecting your bottom line. Advances in technology have led to a long list of processes that even small businesses can automate. For example, there are many aspects of billing and collecting that can be done automatically. In the past, businesses would type up, print off, and mail a physical invoice to clients and then wait for a check to come in the mail. Now, there is software available that will bill your clients and send reminders about outstanding payments all with minimal effort from you or your staff. Instead of sending a check through the mail your clients can pay online, allowing you to get paid much quicker. Automating as many processes as you can without sacrificing quality allows you to lessen the amount of in-house staffers you'll need to hire.  Automated processes are usually much more scalable and less expensive than the old model of bringing on more people in response to growth.

Upfront you will have to put some time and effort into streamlining your business and identifying areas that you can outsource and/or automate. Nevertheless, the payoff has the potential to be big in terms of minimizing your labor overhead costs and saving you time.

Ultimate Guide to Reducing Labor Costs Through Outsourcing

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