In today’s fast-paced business world, efficiency is key to growth. If you find your business struggling to keep up with routine operational tasks, it might be time to consider outsourcing. In the beginning, it’s common for smaller organizations to have multifaceted roles where executive and operational staff are handling multiple functions. When CEOs and top talent are bogged down by tasks outside their expertise, it’s not just frustrating—it can hinder your company’s potential. Here are some of the top signs that it’s time to start outsourcing functions like HR and bookkeeping, and how it could be the right move for your business or nonprofit organization.
Your Strategic Partners in HR and Bookkeeping
At the Consonance Group, we provide bookkeeping, human resources, and financial management services to a wide range of nonprofit and small for-profit businesses. With over 50 years of staff experience, we have seen firsthand how businesses and nonprofits benefit from outsourcing HR and bookkeeping. We’ve also seen what happens when organizations hang onto those functions when they truly need a solution.
Introduction to Outsourcing
What is Outsourcing?
Outsourcing involves contracting out specific business processes to external providers. This practice has grown in popularity, especially among small and medium-sized enterprises (SMEs), as it allows them to focus on their core business activities while leaving specialized tasks to experts. This is often a step taken in lieu of hiring full time support staff. Outsourcing could mean contracting a professional services firm for specialized tasks, or giving specific tasks to an independent contractor.
Why Outsourcing is a Smart Move for Growth
Outsourcing allows businesses to cut costs (compared to hiring), improve operational efficiency, and access high-level expertise without the need to hire full-time employees. It’s an excellent way to scale your business while maintaining focus on strategic priorities. The existing staff will feel the immediate relief of increased bandwidth to focus on their areas of expertise, while the business will benefit from expert support from the selected outsourcing partners. This refocusing can lead to innovative ideas and strategies that might have been overlooked due to time constraints.
The Growing Pains of Small to Medium-Sized Businesses
Operational Inefficiencies
As businesses grow, they often face operational challenges. Back office tasks like payroll processing, bookkeeping, and HR management become time-consuming, leading to inefficiencies that can slow progress. Many times, CEOs, COOs, and other highly skilled staff members are still doing tasks like these, either due to lack of resources or the speed at which the business has grown. This restricts upper management’s time and ability to focus on higher level strategic work.
Bottlenecks Due to Admin Overload
One of the clearest signs it’s time to outsource is when operational tasks start to pile up. If key decision-makers are drowning in paperwork or repetitive tasks, they’re unable to focus on what truly matters—growing the business. Businesses will start to notice they can’t schedule meetings because calendars are too crammed, or they have so many meetings on the calendar that they have no time to actually make progress on work. When staff members start taking work home with them after a day full of calls, it’s time to rethink task allocation.
Key Indicators: Evaluating When It’s Time to Outsource Repeatable Operational Tasks like HR and Bookkeeping
Your Calendar is Full of Repetitive, Non-Core Tasks
When your calendar is filled with tasks like scheduling, data entry, reconciling, and invoicing, it’s a strong indicator that these tasks can and should be outsourced. Anything that is systematic and repeatable is the perfect candidate for outsourcing.
Top Talent is Engulfed in Routine Work
Your top talent should be focusing on high-impact activities that drive growth. If they’re spending their time handling back office functions, you’re not fully utilizing their skills. This becomes a financial drain on the company–paying top dollar for top talent, and spending their hours poorly.
You’re Constantly Behind on Bookkeeping and Payroll
Missing deadlines for payroll or struggling with bookkeeping is a red flag. Not only does this cause stress, but it can also lead to financial penalties or dissatisfied employees. If your inbox is filled with invoice reminders and late filing notices, it’s time to look into outsourcing your bookkeeping.
Your HR records and processes are consistently out of date
Staying current on HR practices is necessary to avoid fines, lawsuits, and organizational bottlenecks. If you find yourself missing out on great new hires due to a disorganized hiring process, desperately trying to dig up the right paperwork when employees have a change, or constantly changing your handbook because it doesn’t seem to cover the right topics… then it’s time to outsource!
The Hidden Cost of Handling Everything In-House
Opportunity Cost of Time
When you or your team spend too much time on non-core tasks, the opportunity cost is significant. You’re sacrificing time that could be spent on strategy, innovation, or customer engagement. Your time is most valuable when spent on tasks that move the business forward.
The Impact on Employee Morale
When employees are overwhelmed with work, it leads to burnout and dissatisfaction. This is particularly true when you have staff working on tasks outside their core functions or below their level of skill and expertise. Outsourcing can ease their burden and keep your team motivated, focused, and effective.
Hiring In-House Staff is Not Cost-Effective
Hiring in-house for specialized roles can be expensive. Outsourcing allows you to pay for what you need without the long-term financial commitments of full-time hires. Some contracts may allow you to increase or decrease support hours at regular intervals, so your cost is directly proportional to your current needs.
High Turnover Due to Lack of Advancement Opportunities
In small organizations, it is common to have high turnover rates because room for advancement is limited. When employees begin to excel in their role and seek more responsibilities, they may need to look outside the company for their next opportunity. This leads to internal churn and disrupts process continuity.
Common Tasks That Are Ready for Outsourcing
Bookkeeping and Payroll
These are two of the most common tasks that businesses choose to outsource. Not only are they time-consuming, but errors in these areas can also lead to significant issues down the road. Instead, businesses choose to outsource to professionals that are up to speed on regulations and best practices.
HR Admin and Recruitment
Between managing employee records and hiring new staff, HR admin tasks can be overwhelming. Outsourcing these responsibilities allows your executives and management staff to focus on development, programmatic work, networking, and fundraising.
The Benefits of Outsourcing HR and Bookkeeping
Increased Efficiency and Focus
By outsourcing, your team can refocus on their core roles and responsibilities, allowing your business to run more smoothly and efficiently. Unfortunately, when your top talent is taking care of those tasks that could be outsourced, you are still paying them as if they’re doing the mission-driven work you hired them to do. Get the most out of their salary by keeping them focused on their area of expertise.
Reduced Costs
Outsourcing helps you avoid the high costs associated with recruiting, hiring, and training new employees, especially for roles that don’t require full-time staff. Outsourcing can be a great step to bring in expert support before hiring is necessary. In some cases, it may end up being a positive permanent solution, if you find a professional services firm that can scale with your business to support your continued growth.
Access to Expertise
Outsourcing partners specialize in specific back office functions, ensuring you have access to the latest knowledge and best practices in areas like payroll, HR, and operational functions. A staff that is stretched too thin may not be keeping up with continuing education, regulatory changes, and industry best practices when they’re just trying to manage to stay afloat. Outsourcing to specialists ensures a high level of expertise and professionalism at a fraction of the cost of hiring full time employees.
How Outsourcing Improves Organizational Growth
Freeing Up Time for Strategy
When back office tasks are handled externally, you and your team have more time to focus on business strategies that drive growth. Outsourcing partners can help keep repeatable tasks off your core staff’s plate so they are fully focused on their strategic roles.
Strengthening Core Competencies
By reducing distractions, outsourcing allows your business to concentrate on developing its core strengths, enhancing both product development and customer service. Having time for continued professional development doesn’t have to be a luxury.
The ROI of Outsourcing Operational Tasks like Bookkeeping and HR
Cost Savings in Hiring and Training
Outsourcing some functions can save significant costs associated with hiring and training. You only pay for the services you need, when you need them. Although you will spend time onboarding an outsourcing partner to your specific needs and process, the firm will handle any changes in personnel assigned to your business and associated training.
Improved Productivity and Growth
When businesses outsource back office tasks, they free up both time and resources that can be redirected towards strategic initiatives. These initiatives, such as product development, market expansion, or customer and donor relationship management, are the true drivers of growth. By reducing the burden of routine tasks like bookkeeping, payroll, and HR admin, key employees and executives can focus on high-impact areas that require their expertise and decision-making skills.
Increased productivity stems from the fact that employees are no longer tied down by repetitive or operational tasks. With more mental and physical bandwidth available, they can engage in creative problem-solving, strategizing, and innovating. This shift in focus accelerates growth as more time is devoted to activities that enhance competitive advantage, build stronger customer relationships, and ultimately increase revenue.
Why Choose a Firm Like the Consonance Group
Tailored Solutions for Growing Businesses
The Consonance Group specializes in providing back office solutions for small and medium-sized for-profit nonprofit businesses. Their services are designed to be scalable and adaptable to your unique needs.
Trusted Expertise in Bookkeeping, Payroll, and HR Functions
For bookkeeping, payroll, and HR administrative services, the Consonance Group offers expert-level support in a variety of administrative areas, allowing your business to run more smoothly and efficiently. With over 50 years of staff experience, the Consonance Group offers unmatched value to organizations looking for specialized support in bookkeeping and human resources.
Conclusion
Outsourcing can be a game-changer for your business or nonprofit organization. It not only frees up time for your team to focus on growth but also saves costs and improves operational efficiency. Firms like the Consonance Group offer tailored solutions to help your business thrive, ensuring that you’re able to focus on what truly matters—scaling and succeeding. By empowering your business to operate more efficiently and focus on the bigger picture, outsourcing creates an environment where innovation can flourish, paving the way for sustainable growth.
Getting Started Outsourcing Your Bookkeeping and HR with the Consonance Group
The Consonance Group is a trusted financial services provider, specializing in bookkeeping, human resources, and financial management for small businesses and nonprofits. We understand that as a business owner, your time is valuable. You shouldn’t be bogged down by these tasks. We can help! Contact us today to get started with a free consultation.
FAQs
What are the top tasks to outsource for a small business?
Bookkeeping, payroll, HR, customer support, and IT helpdesk are the most commonly outsourced tasks for small businesses.
How does outsourcing improve business efficiency?
Outsourcing allows businesses to delegate time-consuming tasks to experts, freeing up internal teams to focus on strategic growth and core business functions.
What are the risks of outsourcing?
Potential risks include challenges of managing remote support firms and communication issues. Choosing a reliable partner can mitigate these risks.
How do I choose the right outsourcing partner?
Look for a partner with expertise in your industry, a solid reputation, and a proven track record. It’s essential to find a firm that understands your business needs and shares your values. Effective communication, transparency, and flexibility are key qualities to consider. A good outsourcing partner will act as an extension of your team, committed to helping you achieve your business objectives.
How soon can I see results after outsourcing?
While it can vary depending on the tasks and the complexity of your operations, many businesses begin to see positive results within a few months. Improved efficiency, cost savings, and freed-up resources are some of the immediate benefits you can expect. The key is to set clear expectations and maintain open communication with your outsourcing partner to ensure a smooth transition.
More questions about outsourcing back office tasks?
Reach out to schedule a free consultation with the Consonance Group staff.