The economic situation is worsening and many believe we’re in for challenging times for the foreseeable future. As part of Duke University’s CFO Report, over 80% of senior financial executives expect higher than normal prices to continue for many months. In this blog, we discuss when it is the right time to outsource finance functions.
While CFOs’ top priority has always been cost management, this year’s outlook puts an even sharper focus on managing expenses.
Here are two of the primary contributors to rising costs and what CFOs and the finance office can do to avoid or offset them:
Want to know how to avoid or offset wage increases now? Download our ebook.
The “Great Resignation” is making an impact
The effects of the Great Resignation have greatly affected many companies. According to the US Labor Department’s latest Job Openings and Labor Turnover Report, 4.5 million workers left their jobs in November 2021. It’s predicted that 23% of employees will look for new jobs in 2022 and 9% have already found one based on the responses gathered in a recent ResumeBuilder survey.
In the US, a new hire usually costs on average $4,129. If it’s just one person, it doesn’t seem expensive, but should you need to hire several or replace several throughout the year, those costs quickly add up.
The way we work has changed
Since the onset of the COVID-19 pandemic, businesses have adopted remote and hybrid working strategies. Working from home or only in the office for a couple of days a week has shown to be more cost-effective and contributes to employee well-being.
Throughout 2020, many businesses invested in initiatives that made it possible for employees to access what they needed to do their jobs from home. This included implementing cloud-based infrastructures, private networks and video conferences.
While pre-pandemic many businesses were dubious about employees working from home, this unprecedented event showed that with the right technology and skillset, employees can work from anywhere and still produce the desired results. Remote work has opened up many opportunities for jobseekers and employees looking for a better work/life balance or to get away from long, stressful commutes.
People are moving quickly from company to company, often in different regions or locations, lured by the promise of higher pay or better benefits, all while never leaving the comfort of their home. It’s a revolution.
The world is your oyster
CFOs, CHROs and recruiters can turn this downside into an advantage. The remote working trend is a boon for employers needing to fill roles. It provides access to a wider pool of highly-skilled professionals who can deliver the same results as local hires at a fraction of the cost.
Benefits of outsourcing finance functions
Has your business been impacted by the Great Resignation or are you struggling to recruit top talent into your financial team? You’re not alone. As a business who’s directly being impacted by the current employment landscape,you understand the ongoing costs associated with recruiting, extended time periods of unfilled roles and the onboarding process.
How is your business addressing rising wages? For some businesses, automation is the answer though that only goes so far before human intervention is required. Others outsource remote staff to do their business processes at a fraction of the costs of hiring local full-time employees.
Finance departments can benefit from outsourcing in a number of ways. For starters, outsourcing accounts payable, accounts receivable, bookkeeping and other back-office support functions can help your business lower overheads.
In general, outsourcing business processes helps streamline business, improve efficiency and productivity and help promote sustainable growth – providing long-term stability and reliability to your business.
Of course, outsourcing doesn’t work for everyone. So, how do you know when it makes sense for your company?
Signs that outsourcing is right for you
When it comes to outsourcing, the needs of every business are unique. However, based on our experience, these are a few of the signs that you that outsourcing finance functions is right for your business:
- You’re time poor – your business could benefit from freeing employees up for value-added work
- You need agility and scalability to keep up with changing demands in a competitive market
- You need to reduce risk with more flexible billing and shorter-term contracts
- you need a significant overhead reduction
- You need greater reliability
- You need to simplify finance staff management
- You’re struggling to recruit high-skilled, talented professionals in your local area and require expertise in your business
Looking to take the next step in your outsourcing journey? With a talent pool featuring thousands of qualified finance candidates, we have the staff you need to achieve success. Contact our team today to find out more.