Biggest Financial Drains of Back Office Operations

By AdminAssist tagged in Outsourcing - Jun 22, 2020 1:00:00 AM 6 min read
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Back office operations are going to be a part of any company but there are certain industries that get hit particularly hard by the financial costs of these operations. For example, there is a lot of importance placed on the back office of staffing and recruitment agencies. Therefore, it should come as no surprise that companies belonging to this industry are often outsourcing their back office operations for financially motivated reasons even more frequently than the workforce average of 59 percent

But these staffing and recruitment companies are not forced to deal with the large financial drain of their back office. Here are some effective ways of lowering the total cost of their back office operations.

Employee Salaries

Before we can get to the solutions, we must first go over what the biggest financial drains of back office operations are. 

One of the biggest issues that quickly drives up the cost of your back office is the salaries of the employees that you are paying to do these tasks. When you try to maintain an in-house back office team, it can get quite costly. After all, the average salary of a back office employee is about $15 per hour. Therefore, if you have two or three full-time employees in the back office, then this can quickly add up to over $90,000 per year just to pay these salaries. That doesn’t even take into consideration the cost of actually performing the back office operations. 

Unfortunately, many smaller companies are often under the impression that this is an easier option for them. Therefore, they are unknowingly pushing their back office employee salaries into almost the six-digit figures. 

This becomes even worse when someone tries to use their employees for multiple jobs and put the back office responsibilities on the shoulders of employees who have other full-time responsibilities. This means that these front office employees will only be able to handle a small portion of the workload that they would be able to get through if they weren’t responsible for any back office operations. 

Some business owners might look at this decision on paper and think that it is the financially smart choice since it is preventing them from having to actually hire and pay for any designated back office employees. However, since this is going to mean their front office employees have lower productivity outputs for their front-end responsibilities, it will require the owner to hire more employees to help prevent the company-wide productivity levels from suffering. 

This just means that instead of avoiding paying the salaries of back office employees, you are instead paying for new front office employees that wouldn’t be necessary if you simply outsource your back office operations. 

When you go with an outsourced company, you are instead using a team of remote professionals who perform back office solutions for your business in addition to dozens of others. Therefore, you are not on the hook for paying the salary of these employees. Instead, that overhead is spread out amongst all of the various clients, which is reflected in the price that these outsourced services often charge you. 

Without this massive amount of money going towards employee salaries, you will be able to significantly cut down on total expenses. In fact, this is a big part of why using outsourced services has often been shown to save companies an average of $17,000 every year

Larger Office Space

It isn’t just salaries that need to be paid for when using in-house employees for back office operations. They are also going to need a sufficient amount of office space to do their accounting, payroll, invoicing, and other related tasks. 

This can sometimes force your company to move into a larger space, which means more money going towards paying the rent each month. Therefore, if you can find a way to get your back office operations done without increasing the amount of office space that you require, then this can save you a lot of money in the long run. 

The easiest way to accomplish this is to use an outsourced agency that handles the back office workload remotely. This means that you won’t have to pay a single dime for their office space and will be able to remain in your current affordable space.

Purchasing Office Supplies

All of that new office space that back office employees require will quickly become filled with the various paper, printer ink cartridges, work computers, desks, and other office supplies that they will need to do their job. These are items that will likely need to be purchased on an ongoing basis, which means the total cost is only going to continue to get larger each month. Luckily, there are ways that you can effectively reduce these costs. 

For example, if you optimize your printer and copier settings, then you can save a significant amount of money on unnecessary paper and color ink usage. This entails setting both the printer and copier in the mode where they automatically print on both sides of pages and have to be manually selected to print in color so that internal documents are not using up valuable color ink for something that doesn’t need it. 

You could also go as paperless as possible, which will make these copier and printer settings rather moot. This will mean less printing and more digital documents, which don’t use up valuable office supplies. 

But the best option for reducing the cost of office supplies during back office operations is going to be outsourcing this entire department. This means helping jumpstart your going green effort by making it necessary for you to receive your various documents and reports in digital form since the job is being done by someone in a different office. 

Now that you know the identity of the biggest back office financial drains, you are in a much better position to understand why outsourcing your entire back office operations is such a valuable strategy. When you’re ready to get some reliable back office solutions, make sure to contact us at AdminAssist.

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