How to Use the Outsourcing ROI Calculator

This calculator will help you estimate the financial impact of outsourcing tasks within your business. By comparing your in-house costs with potential outsourcing costs, you can evaluate the benefits of delegating tasks to external providers.

Step-by-Step Instructions:

Section 1: Task Delegation

Identify Low-Value Tasks:

• In the “Task Delegation” section, list the tasks that you or your team are currently performing that could be outsourced. These are typically repetitive or administrative tasks such as data entry, customer service, or basic administrative work.

Enter Hours Spent per Week:

• For each task, input the number of hours spent per week in the column labeled “Hours Spent on Task Per Week.” This represents how much time is currently allocated to these low-value tasks in your business.

Enter the Current Cost per Hour:

• In the “Cost per Hour (What you’re currently paying)” column, input the hourly cost of the employee(s) performing these tasks. This should include base salary as well as overhead costs like benefits, office space, and other associated costs. If unsure, estimate based on an hourly wage with overhead added (typically up to 80%).

Review the Total Weekly Costs:

• The calculator will automatically show the Total Weekly Cost of Task based on the hours spent and hourly rate. This reflects how much these tasks are costing your business each week.

Section 2: Cost of Outsourcing

Enter Hours Spent per Week for Outsourcing:

In the “Hours Spent Per Week” column under the Cost of Outsourcing section, enter the tasks and the number of hours you can outsource. This may be the same as the previous section. 

Enter the Outsourcing Rate per Hour (Cost You’re Willing to Pay):

• In the “Cost of Outsourcing” section, input the hourly rate you are willing to pay to outsource each task. This is the cost of hiring an external service provider or freelancer to handle the task. 

Review the Total Weekly Outsourcing Costs:

• The calculator will automatically show the Total Weekly Outsourcing Cost for each task based on the hours and the outsourcing rate. This gives you a clear estimate of how much it would cost to outsource these tasks on a weekly basis.

Section 3: Comparing Costs and Benefits

Compare In-House vs. Outsourcing Costs:

• After entering the relevant data, review the totals in both the Task Delegation and Cost of Outsourcing sections. This comparison will show how much you’re currently spending on these tasks in-house versus the cost of outsourcing them.

Section 4: ROI and Annualized Costs

Calculate the ROI:

• The calculator provides an annualized cost analysis for both in-house and outsourced tasks. This section will show you how much each approach would cost over the course of a year.

Evaluate Return on Investment (ROI):

• By comparing the total in-house costs against outsourcing costs on an annualized basis, the calculator helps you determine the potential savings and ROI. This is a key metric to decide whether outsourcing tasks is a financially beneficial decision for your business.

Key Takeaway:

This calculator helps you evaluate the potential cost savings of outsourcing tasks and frees up your internal resources to focus on high-value activities. Use it to decide which tasks are better delegated and where you can save time and money by outsourcing. 

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