Outsource vs. Hire: 6 Tips

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One of the  exciting  milestones when you’re building your business is that moment when you find you have enough money to hire someone to support your business operations. There comes a point when it is no longer feasible or desirable for you to handle every aspect of running your business personally.  But should you be creating an in-house  team or would it be better to outsource as many roles as possible? There is no black-and-white answer to this question but there are some guidling principles you can use to help you decide.

    1. Cost. With an in-house team, you need to account for overheads over and above basic salary. Taxes, social security, office space, equipment, sickness and holiday pay – the list goes on. Those costs are mounting up constantly, so you need to be sure that an employee is productive and performing. Do they really need to be working full-time hours straightaway? By contrast, if the work is outsourced, you can set and control the budget for the outputs you need.
    2. Loyalty and commitment: who is going to care about your business as much as you do? Of course it helps your business if everyone involved is as passionate about its success as you are. Who else will go the extra mile to keep your customers happy, your finances organized, and your marketing messages fresh and relevant? Perhaps with an in-house team it can be easier to build the culture you want for your business to thrive. Working in close proximity may strengthen your relationships. But does that mean an outsourced workforce won’t feel the same connection with you and your business? Will they only care about being paid well and on time?
    3. Availability. So many businesses work on tight deadlines involving weekend and evening work that you may wonder how far you can ask your staff to work unsocial hours. Outsourced professionals are already used to unpredictable work patterns. Your outsourced graphic designer in India may be prepared to work all weekend to meet your deadlines, knowing that their additional efforts are more likely to win a great testimonial from you for their future referrals. They may also make it worth their while by building into their fee structure an element for working beyond a 9-5 schedule. Having said all that, you need to create some kind of service level agreement so that you can be confident that you are receiving your money’s worth.
    4. Flexibility. Outsourced staff need a constant flow of clients. They don’t have the luxury of paid holidays or sick leave benefits. If they’re not working they’re not earning. At the same time, they know they have to adapt to their clients’ changing needs, project scope amendments and so on, in order to build and retain a list of satisfied clients. Flexibility is therefore often part of their own entrepreneurial mindset.  In-house staff may not feel this pressure – they know they’ll be paid even if they have an unproductive day.
    5. Expertise. Outsourced freelancers usually aim to build a wide portfolio of relevant experience to make themselves more marketable and, as one of their clients, you will benefit from their experiences with similar work they have carried out for others.
    6. Performance management. Are you profiting from your staff’s efforts? Who works smarter? Who is dragging their feet? Does the freelancer who charges by the hour or day rather than on a fixed project fee basis really need to take so long to complete those tasks? But, on the other hand, your in-house staff are also being paid for time. How can you measure the value of their efforts?

There are no easy answers and many businesses run on a mixture of in-house and outsourced operational support. Whichever option you choose, you have to balance the pros and cons and work out first what your priorities are, what the risks are, and how you can assure the quality of the support you need.

 

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