Delegation is key to business success. Even if you work 80-hour weeks, there’s a limit to how much you can scale your company if you’re the sole employee. Eventually, you’ll have to start turning down clients because you’re too busy, which costs your business money. Although labor can be expensive, you’ll usually earn more revenue if you bring on employees rather than trying to do everything yourself. Here are 4 reasons why delegating saves money and leads to more business growth.
Reasons Why Delegating Saves Money
Improves Employee Engagement
Many business owners struggle with delegating tasks to employees. They care too much about their business to take a hands-off approach. But employees don’t enjoy being micromanaged. If you hover over your workers too much, studies have shown that you could decrease workplace morale and employee productivity.
Delegating important tasks to employees is crucial if you want to retain top talent and grow your business. Trusting employees to do good work without much oversight improves their engagement with their jobs. And according to a Gallup poll, businesses with high employee engagement are 21% more profitable.
Giving your workers more responsibility also helps them grow in their careers, which may make them more likely to stick around long-term. Turnover is costly for businesses, so you want to do everything you can to reduce it, and delegation is a simple first step.
Frees Up Your Time to Grow Your Business
As the CEO and founder of your company, your time is extremely valuable. There are many high-level tasks only you can do, such as making strategic decisions and meeting with investors to secure funding.
If you spend your days doing routine work an employee or freelancer could handle, you’re likely costing your company money. Your time would be better spent growing the business than handling day-to-day operations.
Research has shown that businesses with CEOs who are skilled at delegation expand faster and generate 33% more revenue than companies with leaders who micromanage. So don’t waste your time on low-level tasks—hand them off to your subordinates so you can focus on more important matters.
Speeds Up Decision-Making
One of the top reasons why delegating saves money is because it helps speed up the decision-making process. The average business spends more than 35% of operating hours on deliberation and problem-solving. Around $250 million of labor costs are lost each year due to slow decision-making.
When every decision needs to go all the way up the management chain, it costs your company money. Allowing your employees to problem-solve and make some decisions autonomously can help your business run more efficiently and save you money.
Allows You to Say Yes to Business Opportunities
Another one of the main reasons why delegating saves money is that it allows you to say yes to more business opportunities. It may seem like you’re saving money by running your business all alone to cut labor costs. But managing your company without support can cost you more money in the long run than you save.
How often do you turn down new business opportunities because you’re simply too busy? Every time you turn away a potential client because you’re already swamped, your company loses money and the chance to expand.
Although hiring and training employees costs a lot of money upfront, that investment will pay off by enabling you to take on more customers. Being able to delegate some of your work to employees will also prevent you from burning out. Burnout can harm your health and decrease your professional efficacy, so it’s best avoided. Make sure you’re taking care of yourself so you can be a highly effective leader.
Are you able to delegate tasks, or do you have a hard time giving up control in your business? Let me know in the comments section below!
Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.