Outsourcing remote staff can be nerve-racking. What if the people you outsource remotely mess things up?
It’s so easy to give in to this fear and continue doing everything yourself.
But here’s what you need to consider:
You are losing money by not outsourcing.
And here’s how you can work out exactly how much...
Step #1: Determine Your Hourly Rate
Here’s how you can calculate your hourly rate:
- Take your annual salary and divide it by the number of weeks you work per year. Now you have your weekly salary.
- Take your weekly salary and divide it by the number of hours you work per week. That is your hourly rate.
For example, according to Payscale, the average small business owner's salary in the United States is $69,748 per year.
Assuming they are working 50 weeks per year, 40 hours per week, their hourly rate would be $34.87/hour.
You can use the Yearly Salary To Hourly Wage calculator if you can’t be bothered to do the math yourself.
Step #2: Do a Time Audit
A time audit is a productivity technique where you meticulously track your time for a week in order to get a more accurate understanding of how you are spending it.
You may want to consider taking it to the next level and tracking your time for an entire month to get a more accurate picture.
Here are the tools you will need:
- Notepad and pen for tasks that don’t require a computer.
- Time tracking software for tasks that do require a computer.
When it comes to the former, make sure to jot down everything, including how much time you spend cooking breakfast, washing dishes, grocery shopping, etc.
And for the latter, RescueTime is a great option. You can also check out their “Where does your time go each day? How to run a time audit in 5 steps [with Free Template]”.
#3 Analyze Your Time Audit Data
Once you are done with the time audit, it’s time to look at the data.
Make a list of all the tasks that you do on a regular basis that fall into these three categories:
- Low skilled repetitive tasks. This is the tedious grunt work that anyone can do with the minimum amount of training. Things like data entry, uploading blog posts from Google Docs to WordPress, etc.
- High skilled creative tasks. These are tasks that require expertise in writing, copywriting, graphic design, photo-editing, video editing, etc.
- High skilled administrative tasks. Think accounting, project management, HR, etc.
Note the amount of time you spend on each of these tasks as well as the amount of money that costs you based on your hourly rate.
#4 See How Much It Would Cost To Outsource These Tasks
Okay, so now go through your list task by task, and see how much it would cost to outsource them.
Here are some outsourcing options that you should look into:
Okay, technically, this isn’t outsourcing, but paying for software will always be cheaper than paying a human to do the same task.
For example, Wordable allows you to import documents from Google Docs to WordPress, so there’s no need to hire anyone for this.
Always look for software solutions first before you consider outsourcing.
This is a new business model where instead of paying an agreed-on fee for a service, you pay a set monthly fee.
For example, Design Pickle offers unlimited graphic design from $399/month.
Productized services are often cheaper and involve less hassle than hiring a freelancer or a full-time employee.
Hiring a Freelancer
You can also hire a freelancer.
UpWork is the most popular platform for that.
Hiring a Full-Time Employee
You may also want to consider hiring a full-time employee.
Business Process Outsourcing Companies
There are also companies that specialize in outsourcing.
Usually, they are based in developing nations (think Philippines outsourcing, etc.), but serve companies in North America, Europe, and Australia.
However, you should only consider them if you have so much work that you need an entire department of full-time employees to handle it.
#5 See if Outsourcing Makes Sense Financially
Now go through your task list.
How much does it cost you to do the task based on your hourly rate?
How much would it cost to hire someone else to do the task for you?
Obviously, if it costs you more to do it yourself than to hire someone, then outsourcing makes perfect sense.
For example, if your hourly rate is $50/hour, then spending five hours on graphic design every week costs you $250/week. That’s around $1000/month.
But you could outsource graphic design to Design Pickle for $399/month.
Not doing so costs you around $600/month. That’s around $7200/year.
Do the math to see how much money you could save by outsourcing all the tasks on your list.
You lose money by doing something yourself, you save money by hiring someone to do it for you. That definitely seems counter-intuitive.
But once you run the numbers, you will see that it’s true. You shouldn’t be doing tasks that could easily be done by someone else.
So stop wasting your time and money.