When To Outsource And When To Hire For Your New Business

When you are starting a new business in the current environment, you may need to be a little creative with your hiring. The trend has been ongoing for some time with many businesses going with a remote team of employees. With the global pandemic even more have decided to keep their workers at home and operate a virtual office. Since this has been the case for a while and it is showing to be very successful, HR departments are wondering if it is even worth it to hire an actual team or if it’s better to outsource.

Since the team is remote anyway it seems to make financial sense to simply hire freelancers from abroad to get the work done. Whether you are a startup or an SME then it definitely pays to dive in and do some research to see which option is best for your company. In this article, I will go over when it makes more sense to hire or if you should just outsource the work.

Pros Of Hiring

When you actually hire people, there is a system that you likely use to make sure that they can work as a team and have the ability to come together for a common goal. For instance you can do a CPI certification to make sure that you are hiring correctly. What is a CPI certification?

This is an assessment done to determine an individual’s strengths when it comes to the position. This ensures that you are picking the right members of the team for their respective roles. This is not easily done when you outsource. Also, you have a team whose members are invested in the success of the company. For one thing, they have the possibility to move up in the company with promotions and raises so would clearly be devoted to making sure of the company’s success.

Cons Of Hiring

The biggest con to hiring over outsourcing is the cost. To hire, on board and train a new employee costs a lot of money. And if that employee leaves, then you have to start the process all over again. Which costs even more money.

Then there is the cost of benefits. To attract top talent, you have to offer benefits that will entice them. They pay may not be enough to get them interested in the position. And in some places you may be required to offer health insurance depending on how many employees you have. There is also a fixed cost to having a permanent employee. You pay for their year’s salary no matter what. If the work is slow you have the ability to lay them off but that is bad both for the employees and for the business. A freelancer can be hired when the workload gets high so you are only paying for the work being done.

Pros Of Outsourcing

The first benefit when it comes to outsourcing is the cost savings. It is more economical on a number of fronts to go with a freelancer. For starters, you are only paying when you need a specific project to be completed. Some freelancers can be hired on an ongoing basis similar to a hire, but work from project to project so if your funding dries up then at the end of the project you aren’t still paying an employee. And if you are hiring for a remote position, you can hire somebody from a low cost of living country. This also frees up a lot of money as they will generally work for less than one of their peers with a similar amount of expertise or experience.

And, lastly, you don’t need to pay benefits and small business health insurance for a remote freelancer. Then, besides the financial aspect is the ease of hiring and letting go. Since you are only asking them to complete a task, you just have to make sure they can handle that one specific task. When it is completed, then the work is done and you don’t have to let them go from a position.

Cons Of Outsourcing

The biggest con to having a hired freelancer doing the work is that they are not actually part of a team and not invested so much in the project. They are basically mercenaries that are just there for a quick paycheck and then move on.

Full time employees are vested in the interest of the company but a freelancer is not so much. In fact, there is even a possibility of exposing yourself to theft of your intellectual property since the freelancer may not be vetted properly as an employee would be.

What Should You Do?

Now that you have learned the pros and cons of hiring, as well as outsourcing, you may be confused on what to do. The are several key instances where business owners would want to outsource services. First, you should consider outsourcing if the job is outside of your expertise. In addition, this may be an excellent option if the work can be accomplished remotely, or will save you time and money. On the other hand, there are several examples when hiring is the right choice. For example, if you are looking to cover HR duties and tasks, or believe you will need the help long term, hiring is likely the most effective option.