With the beginning of 2024, it’s a great time of the year to start leaning into some self-reflection and consider how we can better ourselves moving forward. This doesn’t just apply on a personal note, either. This is a lesson we can look to apply in all facets of our lives, including our professional lives.
Ever since the events of early 2020, the economy has been in an extremely volatile place. There were some events in the decade prior that had caused some economic turmoil, but nothing compared to what we saw happen in the wake of the COVID-19 pandemic. This was an event that would change the world permanently in many ways.
Immediately, businesses closed their doors, and in-person consumerism dwindled significantly. This was partial because of the way that various states handled the hyper-contagious nature of the COVID-19 virus. Rather than risking the majority of their citizens getting sick, or even worse, fatally ill, many state leaders chose to opt for a more safe approach, by issuing stay-at-home orders and limiting in-person shopping.
This led to a major population of the workforce without jobs. Not only that, but a significant population of the older demographic of workers also chose to leave the workforce on their own accord in order to pursue their own ventures or early retirement.
While our economy has managed to stay relatively stable throughout these past few years, businesses and companies are moving into the new year looking for ways to save money and potentially cut costs. The following tips can help organizational leaders do just that.
1. Full-Time Employees Over Freelancers
While it may seem contradictory at first glance, companies can actually save a significant amount of money by hiring a full-time employee, instead of relying on a group of freelancers. Again, this may not make sense at first.
With the cost of health insurance and other benefits coming into play, it would seem like using freelancers over full-time employees would be the cost-benefit of the employer. However, this is really only the case when the volume of work is too sporadic and unreliable to justify the creation of a full-time position and the energy that would be required to then fill that position.
However, in most cases, when companies are regularly using a group of freelancers, it isn’t because they lack a steady volume of work. Rather, it’s because they believe that by utilizing a freelance workforce, they’re somehow saving money on benefits, health insurance, and other cost factors that they don’t have to worry about with freelance or 1099 employees. These costs, more often than not though, are offset in the way that a company actually compensates a freelancer.
Since freelancers don’t have the benefit of health insurance, PTO, and other company-provided benefits, their rates are often hiked. Not only that, but the volume freelancers take on in any given week could completely skew the amount of money that a firm or brand owes them in any given pay period.
Taking this into account, it can actually save the company tens of thousands of dollars a year by hiring a full-time employee with a full workload instead of patchworking assignments with a pool of undedicated freelancers.
2. Implementing Technological Solutions
Technology is a major part of successful business operations in the modern era. From automation to data analysis to social media and digital marketing, technology is everywhere, and behind everything.
New-aged technological programs like an AI content generator, also offer a lot of potential for the future. While most AI writing and content generation programs are very elementary, and shouldn’t be relied on for heavy-duty content or writing needs, the foundation is there for a future product that is more refined.
3. Bringing Efforts In-House
A great way that businesses can effectively manage spending efforts and cut costs is by bringing certain operations in-house. For instance, many brands will outsource certain operations like marketing and advertising.
However, in the long run, these brands can actually save money by pulling marketing and advertising efforts in-house. This way, too, your team will have more control and a dedicated workforce for these specific growth efforts.
4. Consolidating Scope
Another strategy that business leaders and managers can use to effectively reduce costs in the new year is to consolidate the scope of their operations and offerings. Dialing things back and focusing on nailing a single product or service offering is a great way to build brand trust and endurance with a loyal consumer base.
5. Outsource Non-Essential Tasks
Outsourcing non-essential activities or specialized tasks in your business can help you reduce costs and free up valuable resources. Outsourcing can provide access to quality services that are perhaps outside of your reach, while also minimizing labor and overhead costs.
Examples of tasks that you can consider outsourcing to a third party include IT, accounting and payroll services, customer support, data entry, telemarketing, website development, and graphic design. By outsourcing these areas you can access specialists for shorter periods of time without paying workers a full-time salary with benefits.
Furthermore, you may be able to outsource essential activities such as inventory tracking and administrative duties as well. This could lead to increased efficiency by allowing in-house teams or departments to focus on the core functions of their job instead of wasting time on mundane tasks – ultimately resulting in cost savings for the company.
In order for outsourcing agreements to succeed, it is important to research the company’s past performance before entering a contract. Successful contracts rely heavily on properly managing the relationship between both parties so clear and concise expectations must be communicated upfront in order to ensure success.
A Few Final Thoughts
Saving money is on everyone’s mind these days; both individuals and companies are looking for new ways to save money and cut costs. This focus is only going to continue to intensify over the next few months as our economy works to balance itself back out.
If you’re serious about cutting organizational costs in the year ahead, look to the tips above for some solid suggestions.
