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Reducing Your Employee Expenses

Do you run a business? Does your business have high employee costs? Consider a few ways you can reduce those expenses without compromising your work. Read on to learn more.

Hire Freelancers

One of the best ways to reduce your employee expenses is to switch employees to freelance status. When you hire freelancers, you just have to give them their pay. You don't have to pay for things like taxes, and you can only pay people for the work they do. If you have employees, you have to pay them when they're at work, whether they're busy or not.

But freelancers typically charge per project, so you only have to pay for the work they complete. That can be an excellent option if you only need help occasionally. Instead of hiring someone to work each day, you can have them work once or twice a week.

Move Employees to Part-Time

If you want to have regular employees rather than freelancers, you can still save money by switching people to part-time status. When you have full-time employees, you have to pay for a full 40 hours of work per week, and you also have to pay for benefits. You may need to offer health insurance, paid time off, and other non-financial compensation.

Because of that, having full-time employees can be expensive. But if you don't need someone to work for 40 hours, you can move them to a schedule of 25 hours or so. Then, you can still schedule the employee for their work hours, and you don't have to worry about working with a freelancer. However, you won't have to pay for those full-time benefits.

Work Remotely

Another great way to save money on employee expenses is to have employees work remotely. Of course, some employees have to go into work, such as in food service or healthcare. But if you have a marketing agency or a graphic design firm, a lot of that work is flexible, and you can do it from anywhere. Then, you can switch to a smaller office or get rid of it entirely.

You won't have to worry about paying a high electricity bill or paying as much for an office lease. Instead, you and your team can work from home or wherever, so you can save money on daily operations. Working remotely can also have other benefits, so you may find your employees are just as productive if not more so when they work from home.

Shop for New Insurance

You can also reduce your employee expenses by switching to cheaper insurance plans. As an employer, you may need to pay for health insurance, dental insurance, and even workers' compensation or unemployment insurance. Look at different insurance quotes to see if you can find a cheaper plan that still has what you need. Then, you can reduce your costs.

Just make sure you choose insurance that meets any legal requirements. If you have full-time employees, choose health insurance that fits ACA requirements. And for unemployment coverage, make sure it's enough for your state.

Get Rid of Unnecessary Tools

Some business tools can be useful, and you may need them to get work done. But consider if you're paying for anything that isn't as important or that has a free alternative. You should also consider if your tools charge a flat rate or if they charge you per user. If the tool charges per user, keep it accessible only to those who need it. Then, you can still use the tool, but you can save money.

If you have a free alternative, that's even better because everyone can still use it. Still, you may find that you don't need all of the tools you have. Evaluate what you use every few months and get rid of the things that aren't helpful.


Running a business involves a lot of costs, and some of those apply to employees. Luckily, you can do a few things to lower your employee expenses. Keep these in mind next time you want to save money.

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