Fact: Outsourcing of Accounting and Payroll functions provide average cost savings of 17.6% (Magma)
Norwegian studies (the 2007 Outsourcing Survey by BI / The Research Council of Norway / Accenture) concluded that outsourcing of accounting and payroll function achieves on average a cost reduction of 17.9% and 17.3%, respectively (Magma).
Economies of scale are achieved through merging functions and better utilization of resources. This means increased flexibility, lower costs and access to new technology, which normally would be reserved for larger entities. Scalability and customization options - adapting to size and market situation - makes it easy to reconfigure, even with sudden changes in the macro picture.
Employment costs are a major expense item for most Norwegian companies today. International studies have concluded that an unsuccessful hiring decision costs about 1.5 times the annual salary. It also concludes that 15% of total hiring is characterized as a blunder (NA24). In addition there are lost revenue potential relate to training, as well as sick-leave and absence.
Proffice in cooperation with the Response Analysis conducted a nationwide labour market survey of 992 managers and 1222 employees, according to the newspaper Dagens Næringsliv (2011). They concluded that 66% of managers in Norway make at least one wrongful hire equal to the total cost of nearly half a million kroner. In addition 7 out of 10 managers claimed that the Work Environment Act makes it very difficult to get rid of unwanted employees, which further deteriorate the cost picture.
Uncovering corporate-risk can create large capital gains by choosing the right outsourcing agreement. We can, after many years of good results in this area, prepare a management report of likely gains and provide systematic guidance for implementation.