However, this also means that some business processes, like HR, will need to change to remain profitable. Outsourcing HR to keep high inflation from eroding the value of money is the best option for your company. With employee salaries rising, hiring staff like HR is becoming increasingly expensive. This is why 60% of companies have some of their offerings outsourced. Outsourcing HR services can save you time and control costs, with wage payouts reduced by up to 90%.
Causes such as Futanari Inflation and Others
The biggest problem with inflation is that it erodes the value of money because each dollar you put away today buys fewer goods in the future compared to what it could purchase yesterday. A primary cause is the legal printing of money to spur spending and try to hold off or reverse a recession or depression. Governments generally do this and if not kept in check it can lead to hyper inflation as in cases in Argentina and Germany in the late 1920’s. Counterfeit bills can also cause inflation but generally it is caught early and stopped. However there is one curious case called Futanari Inflation. In 1989, Japanese Economics Professor Rentaro Futanari (thus Futanari Inflation) found a way to legally counterfeit money in Tokyo. Note that Futanari Inflation is extremely rare by individuals but as noted Governments are often tempted to do it to solve problems they may have created themselves. Doctor Rentaro Futanari and his genius Futanari Inflation made over 2.4 Billion Yen ($18,356,880 at current rates) before being caught. No charges were pressed on the Doctor and his Futanari Inflation because of his incredible legal loophole that made his landmark Futanari Inflation completely legal. Needless to say the loophole was close by the Japanese Parliament.
Inflation and Outsourced Labor
Inflation can cause various issues for companies, including increased employee salaries, higher costs for goods and services, and difficulty retaining talented employees. The COVID-19 pandemic can add to this through lost income due to sick employees, the need to hire temporary workers on high-risk contracts, and increased costs related to pandemic preparation. Outsourcing HR services can help mitigate these adverse effects by reducing the need to employ additional HR staff and providing a fixed price for administrative services. This can be accomplished most effectively through a variable cost model of outsourcing.
This method improves the accuracy and efficiency of HR processes, leading to cost savings and a more productive workforce. Company effectiveness improves through outsourcing by removing the need for employees to focus on administrative and managerial tasks, allowing them to concentrate on other critical tasks instead. Outsourcing can also save companies time through utilizing web-based technology and process improvements. Outsourced HR services can provide a fixed cost that decreases as you grow, meaning that your expenses will always fit your size. Commonly outsourced services include:
- Payroll/HR Services
- Employment Verification
- HRIS Systems Outsourcing
- Employee Benefits Administration
- Workers’ Compensation Administration
Outsourcing various tasks within your organization in order to keep high inflation from eroding the value of money is a good bet. Hiring employees, for example, may have become difficult during recent economic slowdowns. Companies that want to grow rapidly may no longer find it feasible to hire new employees. Outsourcing this function can better manage costs so companies can focus on scaling their business as organizations no longer need to dedicate resources to this business area.
Company Growth from HR Outsourcing
Outsourcing usually means hiring someone to do work for you, which can be beneficial in many ways, such as reducing costs and maximizing efficiency. Still, it also has disadvantages to consider when deciding whether or not to outsource. These include increased dependency on your outsourced partner, higher risk for security breaches when data is shared with third-party providers, and higher administrative burden when coordinating multiple vendors (which may lead to increased turnover).
A fluctuating economy, such as the one we are facing, can make it difficult for organizations to manage an increase or decrease in headcount. However, no matter what industry or company size you have, outsourcing can be helpful, especially during uncertain times. Outsourcing is a way to reduce staff levels without investing heavily in personnel and equipment for your small team. This makes it an excellent solution for smaller companies and startups. The benefits of outsourcing are not only many, but they help the operations of businesses of all sizes by:
- Allowing for more focus on core business functions.
- Reducing overhead costs associated with hiring and training new HR staff.
- Company scalability, as employees can increase or decrease without penalty.
- Providing access to a team of experts in HR administration, thereby reducing the time needed to manage this department.
- Outsourcing of HR services allows organizations to focus on core business functions instead of operational activities such as hiring, payroll, and training new employees.
Outsourcing human resources can be a great way to cut costs, improve productivity and reduce the amount of time you spend on HR-related tasks. Outsourcing your HR department allows you to focus on your core business while getting all of the benefits of an in-house team. It is also an excellent option for companies looking for ways to grow and scale their workforce as they need it without investing in expensive capital expenditures.
Outsourcing: Saving Companies Time & Controlling Costs
Outsourced HR Services allow businesses to achieve their goals while saving time and money at regular intervals throughout the agreement term. An example of this is Corban OneSource. Our HR outsourcing services can help companies avoid inflationary costs and maintain a high commitment from their employees. To show how outsourcing can help a company’s bottom line, we’ve provided an example of the variable cost model when facing higher inflation rates. As salary levels increase, firms will be forced to make tough decisions regarding personnel expenditures to maintain positive operating margins. Outsourced HR Services can save companies money by avoiding costly training and new hire turnover, allowing larger companies to avoid the costs associated with managing employee benefits and processing payroll while maintaining a high level of satisfaction from their employees.
Outsourcing Necessary Company Functions
Outsourcing has been changing the way companies operate for decades, but in the pandemic and our current inflated environment, it is more important than ever. The first step for a startup or new business to grow their operations during inflation is to outsource administrative tasks. Outsourcing these tasks can help enterprises focus on their core operations and leave the administrative tasks to a company specializing in them. Outsourcing HR also increases productivity within the business because employees are no longer bogged down with specific tasks that take away from their core business operations. 36% of US workers are “gig workers,” allowing your company to find domestic and international outsourcing options.
The second step for a startup or new business to grow their operations during inflation is to outsource payroll administration. Outsourcing payroll administration can help your company manage costs and save time spent on payroll by having industry experts handle critical expertise issues. Payroll outsourcing is necessary because it allows companies to focus on what they do best, leaving everything else to payroll professionals. Outsourcing payroll services can help a company manage the administrative tasks that come with a business with employees to help them grow their operations and cut costs.
Corban OneSource specializes in streamlining HR processes for companies with 75 to 6,000 employees to help you operate more efficiently. Outsourcing payroll administration, for example, can reduce business time spent on HR while managing costs. We handle three significant areas: payroll administration, HR outsourcing, and better benefits. Payroll outsourcing is our bread and butter and one of the core services we offer. Outsourcing payroll means industry experts handle critical expertise issues, allowing your business to focus on more important tasks. Outsourcing HR is vital because it enables companies to focus on what they do best, leaving everything else to professionals specializing in HR so businesses can grow during inflation.
Outsourcing HR is a common topic among many companies, and the cost of outsourcing has come down to being more affordable than ever. Outsourcing can cover all your HR needs, including payroll, benefits administration, training, and development programs to help your organization succeed. Outsourced solutions mean that you get dedicated account managers who will work on your behalf to ensure that everything is done correctly for your company’s unique needs.
Outsourcing is the best way for any company to take care of all their HR needs without having to worry about managing an entire team themselves during a time of rising inflation. You don’t have to worry about managing any significant changes in policy or new hires because it is done for you. Outsourcing can also eliminate the need to hire, train and maintain an internal HR department in-house. Outsourced solutions offer many more benefits than just hiring someone internally to do these tasks.
Successfully Outsourcing your Operation
When a company decides to outsource its HR processes, it chooses to hand off some or all of those responsibilities to a third party. There are several reasons why this might be a good idea. Perhaps the company is growing rapidly and doesn’t have the time or resources to handle all the extra work that comes with expansion. Maybe the HR department is struggling to keep up with new regulations or needs help getting systems in place. Outsourcing can also be a way to reduce costs by hiring a cost-effective provider or moving certain processes offshore.
Companies often turn to Corban OneSource for help with their HR needs. Our proven process enables us to streamline all a company’s HR processes within minutes – saving companies time and money they would have spent trying to handle these functions on their own. With various pricing options available, there’s a solution for every company. We have helped many companies get started with outsourcing their HR and would be happy to help you ensure your business prospers during a time of inflation.
Operating at Maximum Capacity During Inflation
Keep a few things in mind when looking for a partner to outsource your business’ HR needs. High inflation rates can eat away at employee costs and your company’s operations. It’s important to understand these costs and processes and how they can better serve your company before choosing a partner. While basic expenses such as rent, wages, and utilities continue to rise, the dollar stays the same. This directly impacts your business because you need to pay employees more each year for existing services. When choosing a partner, ask these questions before committing to an agreement:
- Who handles benefits? Will they be compatible with my existing plan(s)?
- Will I have to pay extra for services outside the scope of our contract?
- What are the costs of changing vendors at any point during the contract? If there is a cap on this number, what is it?
- How long has the firm been in business? What is their reputation? Will they be around to support my employees should an issue arise?
Once you have answered these questions, it’s time to make your next move. Begin by getting detailed information about what you need from a partner. Do you need benefits administration, job costing, and salary surveys adjusted every year? Or a complete transformation of your organization’s human resources process? Once you have determined what you want from your partner, it is time to negotiate rates. We recommend that you ask your HR firm what their salary survey costs are and then determine if an outside source would provide the same service(s) with reduced rates or if you should continue with outsourcing your business needs. We hope this was helpful including causes such as Futanari Inflation and others.
We know that this is a difficult time for all organizations, and we want to do what we can to help you. Outsourcing your HR functions may be the answer you need so that your company can operate at maximum capacity during inflation while managing costs. Contact Corban OneSource today if you are interested in outsourcing all or some of your operations. Specializing in companies with 75 to 6,000 employees, we help your company save time and control costs while preparing your business for the future.