In today's fast-paced business environment, maximizing productivity is crucial to staying competitive. Yet, many businesses are bogged down by inefficiencies they may not even realize exist. Studies show that the average knowledge worker is productive for only about 3 hours a day. This startling statistic should give any business pause when considering the true cost of hiring a full-time employee. For small and medium-sized businesses, particularly those in need of specialized skills like accounting, these inefficiencies are not just an inconvenience—they're a financial drain.
As businesses rethink their operational models, outsourcing critical functions such as accounting to a 1099 contractor offers a smart and cost-effective alternative. With Altruistic Accounting & Business Services, companies can eliminate the hidden costs of full-time employees, reduce inefficiencies, and tap into the expertise of a CPA, resulting in significant savings and improved performance.
Let's start by addressing the elephant in the room: employee productivity. According to numerous studies, full-time employees are not working at peak efficiency. Interruptions, inefficient workflows, and constant distractions prevent employees from doing their best work. For example:
Beyond low productivity, the true cost of hiring a full-time employee extends far beyond the base salary. Many employers fail to account for additional expenses that come with a W2 employee, such as:
When you tally up these expenses, the actual cost of a full-time employee can be staggering. Even with a modest salary, these additional benefits and taxes can increase total compensation by 30% or more. Worse yet, employers are still paying for these benefits even when employees are not fully productive, as we have seen with the interruptions, unnecessary meetings, and email overload.
The case for outsourcing becomes clear when you consider these factors. Contracting with a company like Altruistic Accounting & Business Services allows businesses to avoid these costly overheads while gaining access to high-level talent. Here are the 3 key benefits:
One of the most significant issues facing full-time employees is the cognitive burden of "context shifting." This happens when workers are forced to switch between tasks, such as responding to emails, attending meetings, and handling project work, answering phone calls, etc. Each time an employee shifts focus, it takes time to reorient, resulting in lost productivity.
A study from UC Irvine found that after an interruption, it can take an employee 25 minutes to return to their original level of productivity. In many cases, these interruptions are inevitable, especially in traditional office environments where collaboration, quick check-ins, and meetings are part of the daily routine.
By contrast, outsourcing accounting tasks eliminates much of the context shifting that occurs in-house. A contract accountant is singularly focused on completing the financial work you’ve hired them to do without the added distractions of internal office dynamics. This allows for greater focus and efficiency, ensuring the job gets done right the first time.
While "time theft" might sound harsh, it's important to recognize that even the most well-meaning employees are prone to inefficiencies. Time theft includes:
These small instances of inefficiency add up. Studies estimate that 4.5 hours per week are lost per employee due to these factors. When this is combined with other forms of productivity loss, it can cost businesses thousands annually. Contracting out accounting work ensures that you’re not paying for these inefficiencies; you’re only paying for the productive hours.
In a business landscape where productivity is king, paying for inefficiency is a recipe for lost profits. By outsourcing your accounting work to a firm like Altruistic Accounting & Business Services, you can ensure that you’re paying for high-quality work without the overhead of a full-time employee.
The combined benefits of lower costs, access to more experienced professionals, and fewer inefficiencies make outsourcing a clear choice for any business looking to optimize operations. Now is the time to rethink your staffing strategies and see how outsourcing can elevate your business and your bottom line.