Small and medium enterprises (SMEs) in the UK are facing a significant challenge in their 2024 budgets with the increase of the minimum wage to £11.44 per hour from next April. This regulation change will directly impact wage bills when employing full-time, part-time, or temporary staff. As a result, SMEs need to be proactive in finding solutions to manage this increased cost without compromising on the quality of their services or losing staff. In this blog, we will share with you some of the benefits of outsourcing and flexible resourcing, that can help you meet your business targets while keeping your costs under control.
Outsourcing is an excellent option that SMEs should consider to manage the increase in their wage bills. It involves hiring third-party companies to provide specific business services, such as accounting, customer service, or marketing. Outsourcing companies have their own teams with specialised expertise, resources, and infrastructure that SMEs can benefit from. Additionally, outsourcing comes with considerable cost advantages. There is no need to pay pensions, national insurance contributions, holidays, or sick pay for outsourced support, and this can significantly ease the pressure on a small business.
Flexible resourcing is another alternative for small businesses. It refers to the use of temporary, part-time, or freelance workers instead of full-time employees. Flexible resourcing allows businesses to quickly adapt their workforce to meet the demands of their business. It is particularly useful when there is a need for extra staff during peak seasons or alternatively, to scale back when business slows down. In addition to cost savings, SMEs benefit from the reduced administrative burden that comes with hiring and managing temporary and short-term staff.
By opting for outsourcing or flexible resourcing, SMEs can also add more value to their business while controlling costs. Outsourcing companies bring in their expertise and experience, which can provide a competitive edge for small businesses. A full-time workforce may not have the same range of skills and knowledge as an outsourced team who are fully immersed in their speciality. Alternatively, businesses employing flexible resourcing can quickly access additional resources to get more work done, and they will only be paying for work on an as-needed basis.
Another added benefit of outsourcing or flexible resourcing is that SMEs can avoid the risks and costs associated with recruiting new full-time staff. Hiring permanent staff entails considerable time, effort, and cost to ensure compliance with employment laws. Employee vetting, tax calculations, and the other administrative burdens can add up to a considerable amount!
The minimum wage increase in 2024 presents a challenge for SMEs, but don’t panic. – By embracing outsourcing or flexible resourcing, costs can be mitigated, and experience and expertise can be leveraged. With lower costs of employment while maintaining service delivery, access to specialist skills, and lower administrative burdens, opting for outsourcing/flexible resourcing can bring significant benefits. Get to know the options available, and be better prepared to plan and produce a well-informed 2024 budget.
If you would like to find out more about our flexible, back-office support for SMEs then please get in touch. We would love to hear from you!
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