Labor costs are one of the most sizeable line items in a small business budget and, typically, the more a business can automate its processes, the lower labor rates will be. Automation can increase output factors like quality and turnaround time at a lower cost. But what happens with those tasks and processes that can’t be automated or don’t make economic sense to automate?
For these tasks, instead of hiring specialized in-house employees to address the issue, it could be a shrewd move to outsource. Here are several ways contract labor services can help save your company money.
Get more cost-effective use of your current workforce
When you outsource your specialized tasks or business processes, particularly when those services are non-mission critical and time-consuming, your existing employees will have more time to focus on the jobs for which they were hired and trained. They will work more efficiently and effectively on their customary tasks while the contract labor performs with the specific skills necessary for the job. This allows them to do it for less cost than your higher-value, permanent employees.
Minimize labor costs on unproductive time
Business owners recognize that their employees cost more than their wages. Employers will often need to pay more above base wages when all payroll costs are loaded in. Now add in the unaccounted-for costs of paying for downtime when employees have slow periods, and the costs can really add up! However, keep in mind that downtime is unavoidable and even reasonable in any job position and with the most exemplary of employees.
When you hire an outsourcing firm, you are paying a pre-negotiated rate for work that is promised with a specific delivery date – whether or not 100% of their working time was productive. By outsourcing, you can minimize these additional labor costs and get a better value on quality work.
Outsourcing makes you more agile for less
Peaks and valleys occur in most any business. Either situation presents a challenge, i.e., how do you get the work done most cost-effectively. Outsourcing can be the answer in either scenario. In high-demand times, you can ramp up without having to hire and train new people that may not have enough to do when the down times inevitably come.
Another issue that commonly comes up is when customers ask for changes—which they often do—and you’re suddenly faced with gaps in your workforce’s ability to handle them. No problem. You can outsource to a capable team with a variety of skills that already knows how to perform that work.
Lower your costs and outsource the right way with Ohio Valley Goodwill
As much economic sense as contracting out makes, there’s no win in trading lower labor costs for additional spending to fix mistakes. Check out our testimonials and you will discover that small business owners in the Cincinnati area choose us for our reliability and quality work as well as our cost-effectiveness.
Contact Ohio Valley Goodwill’s Industrial Services Division for a quote on your next contract labor project and receive a free tour of our facilities. We would be happy to speak with you!