How to save money on staff as a start up

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Date: 16 November 2021

A manager talking to his new staff

It's the classic catch-22 when you start a business. You need staff to help you grow but given your start up status, you may not always have the funds available. Here we share our advice on how you can save money on staff whilst still having the help needed to get your company started.

Employ part-time staff

When building your team, start with part-time staff so you can really optimise your time. This may mean having someone on board a couple of days a week or a few hours every day. By doing this, staff can condense their work into the hours that they are with you and can make sure that they are prioritising what needs doing most urgently.

Working with part-time staff, you can agree on a part-time contract or agree on a day rate. The beauty of part-time agreements is that they allow a great level of flexibility which can benefit both the employer and the employee.

If you are uncertain whether you want to keep these team members on in the long-term, opt for shorter temporary contracts (perhaps 3-months). This will give you adequate time to assess if the employee is a good fit for the company and you will always have the option to extend their time.

The right people at the right rate

Stay open-minded when thinking about who the perfect fit for your team might be. If you are looking to keep a lid on your wages bill, employ someone for limited hours a week rather than someone who is looking for a full-time position in order to align expectations.

There are many qualified workers who are looking for flexible jobs to juggle around their other commitments. For example, new parents, those with care responsibilities and those who already have a part-time job may be able to devote a few hours a day, be highly qualified, and find that your job offering fits perfectly around their other commitments.

Outsource tasks

There are many resources available which enable you to outsource various tasks from social media marketing to bookkeeping, web design to HR. Fiverr and Upwork are just two of the websites that can connect you with the right freelancer for your needs. Fiverr can connect businesses with freelancers across multiple digital fields spanning more than 300 categories. Similarly, Upwork can help find freelancers and talent from all over the world.

"As a start up, you always need help here and there," explains David Beard of Lending Expert, a fast-growing price comparison site.

"Whilst it would be great to hire someone full-time, you do not always have enough work for them for five days a week or the capital available. Using freelance-based websites like UpWork are very effective for things like graphic design or help with back-end development, giving you the option to pitch your task requirements and get personalised quotes and CVs to check through."

This option can help you outsource key tasks and save you the time and effort of resourcing internal specialists. Additionally, if you pay per task rather than bringing someone on for a specific company role, it is a great way to optimise and save money for your start up.

Consider offering shares or bonuses

Offering bonuses has clear implications for team motivation; if staff are given the possibility to earn more based on their work performance, they are motivated to work more efficiently and productivity, boosting the overall performance of your company. However, bonus systems also enable an employer to offer a lower base salary which will save them money in the long-run.

Additionally, start ups may opt to offer shares in the business to team members. This incentivises employees but also avoids any initial company pay out. If the company succeeds, early employees can be rewarded if and when the company goes public. Thus, employees are motivated to work hard for the overall success of the company and the business needs only pay out if the company succeeds and goes public in the future.

Copyright 2021. Article made possible by Tudor Lodge Digital.

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