# Outsourcing Savings Calculator

## About Outsourcing Savings Calculator (Formula)

The Outsourcing Savings Calculator is a tool designed to help businesses determine the potential cost savings they can achieve by outsourcing certain tasks or functions. By inputting key variables such as the current number of employees, the average rate of employees, and the outsourcing savings rate, the calculator generates an estimate of the potential savings.

The formula used in the Outsourcing Savings Calculator is as follows:

S = 251 * 8 * #E * AHR * OSR

Where:

• S represents the outsourcing savings
• 251 represents the average number of working days in a year (considering weekends and public holidays)
• 8 represents the average number of working hours in a day
• #E represents the current number of employees
• AHR represents the average rate of employees per hour
• OSR represents the outsourcing savings rate as a percentage

To calculate the outsourcing savings, the formula multiplies the number of working days in a year, the number of working hours in a day, the current number of employees, the average rate of employees per hour, and the outsourcing savings rate. The resulting value represents the estimated cost savings that can be achieved through outsourcing.

It is important to note that the accuracy of the savings estimate relies heavily on the accuracy and relevance of the input values. The calculator assumes that the tasks or functions being outsourced are comparable to those performed by the current employees, and that the outsourcing savings rate accurately reflects the cost reduction achieved through outsourcing.

The Outsourcing Savings Calculator provides businesses with a valuable tool for assessing the potential financial benefits of outsourcing. By considering factors such as labour costs and operational efficiency, businesses can make informed decisions regarding outsourcing strategies and determine whether it is a viable option for reducing costs and increasing overall profitability.