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Knowing it’s time to outsource your back-office function

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    Knowing it’s time to outsource your back-office function


    As billing increases and healthy profit margins become a reality for many recruiters, growth plans for their agencies are often achieved sooner than initially anticipated. However, with this growth comes an escalation in responsibilities related to payroll, invoicing, and other back-office functions. These responsibilities can divert attention from the core task influencing the bottom line more than any other – selling.

    So, how do you determine the optimal moment to delegate your back-office operations to an external partner? Here are some indicative indicators:

    Rapid Business Expansion

    The prospect of onboarding a new client with numerous contract roles is undoubtedly pleasing to most recruitment business owners. Managing your back office becomes increasingly time-consuming and intricate as your business expands.

    Sole-Trader Mindset

    If your business’s growth relies heavily on sales, personally handling certain administrative functions can encroach upon your primary profit-generating activity – selling. This approach might cost your business more than it would to outsource these tasks initially.

    Costly Errors

    Acquiring new skills, from compliance to payroll, chasing invoices, and dealing with HMRC, is imperative. However, mastering these skills can be time-intensive. Outsourcing to an external provider responsible for managing these aspects keeps your finances current and ensures your business’s compliance.

    Constant Fire-Fighting

    Have you observed a decline in new business meetings lately, coinciding with a slowdown in growth and profits? This decline might stem from losing focus on your business’s core and an increasing allocation of valuable time to various payroll, HR, and compliance activities.

    Office Division Between Consultants and Accounts

    Office space doesn’t come cheap. If you discover that a significant portion of your office is occupied by consultants generating revenue while the accounts team occupies the rest, it’s crucial to reassess priorities. Visualize an office composed entirely of revenue-generating consultants – the potential impact on annual profits is considerable.

    Selecting the Right Team: Accomplished business leaders often emphasize that their ability to choose the right team members is a key strength. Could this be your strength as well?

    As your recruitment agency experiences growth, recognizing these signs can help you gauge when outsourcing your back office functions to external experts is a strategic move. This transition can allow you to concentrate on core revenue-generating activities and pave the way for sustained success.

    Ready for a change

    If you seek an adaptable back-office solution that lets you concentrate on your strengths, contact the Simplicity team today.

    Read our latest blog – How smaller agencies can compete in the market place

    Editors note: This post was originally published on 23rd November 2016 and has been completely revamped and updated for accuracy and comprehensiveness.