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July 8, 2020

Systems Administration & Support: The Real Cost of New Hires vs. Outsourcing

Popular belief follows that outsourcing business functions is prohibitively expensive, but have you ever taken the time to calculate the real cost vs. benefit of bringing on experienced technical resources who can be effective from day one? Here we’ll explore some important things to consider when making the decision to hire or outsource.

Talent Pool

When recruiting new hires, your talent pool can be greatly limited by geography preventing you from finding quality candidates with the right expertise, experience level and specialization. It can take weeks or more often months to recruit, vet and secure just the right candidate. And, maybe you don’t need a full time resource but the best candidates are looking for full time positions.

Outsourcing opens your organization to a larger talent pool at your fingertips. And, when you outsource, you have the ability to split time between resources (full or part-time), essentially taking advantage of the experience and specialization of multiple resources in one. Below is a cost comparison showing a range of experience levels with average salary.

To have all of these resources on staff can certainly be cost-prohibitive for many organizations, but with an outsourcing relationship, you could benefit from the experience of all resources without the carrying cost.

Continuity & Flexibility

Another critical concern is business continuity—your organization’s ability to operate in case of employee leave or turnover. When managing full or part-time employees, it can be difficult to predict changes and shift resources as vacancies occur. Your available resources may not have the experience or specialization to handle the new responsibilities. For example, it can take years to develop the level of expertise needed to successfully deliver complex projects, especially when it comes to implementations, custom programming and report development.

Outsourcing puts multiple resources with varying experience levels and specialties at your fingertips allowing you to shift resource hours and resources as needs change by department, quickly covering anything from vacation to extended leave of absence or vacant positions with knowledgeable resources who make an impact from day one.

Cost Comparison

When considering outsourcing, or even mentioning the word, many people see dollar signs. But, when you take a closer look at the real cost of hiring a new employee vs. outsourcing, you’ll find that the true cost of employees, when including benefits, training and office overhead, can be 1.5 to 3 times salary.

Outsourcing programs such as managed services can provide organizations with the opportunity to take advantage of discounted rates as compared to traditional time and materials consulting rates that may be cost prohibitive.

For example, we’ve provided a comparison of an industry average time and materials consulting rate for property management system consulting vs. an ongoing support contract which allows organizations to take advantage of volume discounts. These options are not only affordable but they allow organizations to predict costs and shift the resources and hours to where they are needed most.

Ramp Up Time

When recruiting a new hire, you are likely very diligent with trying to find the right person with the right qualifications for the job. But, did you know that it can take anywhere from 6 months to 2 years for a new hire to be fully operational? This huge lag in productivity can cost you a lot of time and money. Conversely, outsource resources have the necessary background and practical best practices experience to be fully operational as helpdesk or project-based support from day 1.

Shift Focus Toward Strategy & Planning

Let’s face it, organizations today are under pressure to operate as lean as possible, but when your employees are buried in day-to-day tasks as well as figuring out how to manage major technology initiatives, this leaves little time for strategic planning or focus on corporate initiatives.

Outsourcing allows you to offload as much or as little work and responsibility as needed so that you can focus your precious resources on your organizations strategic vision and allow others to handle the day to day operation and project work.

If you’ve been considering outsourcing, but just haven’t taken that next step, or if you’d like to learn more about how outsourcing can help your organization, please contact us to schedule a discovery discussion at info@jdrconsulting.net.