In-house versus Outsourcing: Let’s do the Math
We’ve all heard the common catchcry that outsourcing can save you money. But does it really? Well let’s do the math!
So, you’ve decided you can afford to pay a staff member $25 per hour, which on a full-time basis is $48,750 per annum. But that’s not all it will cost you!
There’s all the employee benefits that you must pay: Superannuation contributions and worker’s compensation insurance. Your employee is going to want annual leave – four weeks per year – for which you will have to find cover, either from within your practice or bringing in a temp (add another 25% for this period). Oh, and sick leave plus public holidays, not to mention any overtime. Another $14,000 on top of the initial annual wage.
Now we’ve dealt with the employee benefits, let’s look at all the day-to-day costs. Rent on your office space, furniture, purchase of IT hardware and software, plus all the maintenance and depreciation that goes with it. Let’s round this to a nice neat 3% or $1400 pa.
And this is assuming you don’t have to source, recruit and train/mentor your ideal employee. Another $2500 pa averaged over a two-year period for your HR department.
Add all these together and your transcriptionist is suddenly costing you in excess of $66,000 per year – nearly 50% more than first anticipated.
So if you’re going to spend all this money, are you getting good value?
A standard transcriptionist typing at 80 words per minute will type about two hours of audio in a standard work day, or about 750 lines per day. Allowing for holidays and sick leave and public holidays, that’s nearly 165,000 lines per year – or about 40 cents per line, all things being equal.
However, in business, things are never equal.
If there’s nothing to type, your cost per line goes up. Productivity will also drop depending on the quality of the recording, the number of speakers in the recording, additional formatting required, not to mention the specialised knowledge and expertise and/or amount of research your transcriptionist needs to undertake.
By outsourcing your transcription needs you no longer have to pay employee benefits, general operating overheads, recruitment or training costs as these are all covered by your contractor. There’s no down time for the employee, you only pay for the work completed. And productivity is generally higher as your new provider has the specialised skills and training required to complete the work quickly and efficiently.
It’s not surprising that many businesses are looking at outsourcing their transcription needs.
Like to know how you can save by outsourcing your transcription? Contact Annaliese to arrange an obligation-free meeting to discuss your needs
Recent Posts
