When a large project looms, you will almost always have to consider outsourcing some of the work. Maybe your team doesn’t have the necessary skills, the time, or just don’t want to deal with it. Whatever the case, there are upsides and downsides to outsourcing and hiring (or training) someone in-house.
To start, ask yourself these questions about your project:
- How long will it last?
- What is the scope of work?
- Does your team currently have the necessary skills?
- How much time would it take away from your team’s current workload?
- What is your budget?
Once you answer these questions, you can take a closer look at whether outsourcing or staying in-house will be the best solution.
Contractors make a living from those choosing to outsource – but finding the right one can be a challenge. Your purchase decision can be guided by reading reviews, hearing things at events, or recommendations through your network.
Contractors have a specialized skill set.
This is a biggie. If your crew doesn’t have what it takes to get the job done right and that is a top priority for you, outsourcing might be a good choice. A lot of times, contractors have specialized degrees, maintain reputable certifications, and have decades of experience in the field. Challenges don’t phase them, because no project is exactly like the next.
They know about the best equipment.
For specialized work, purchasing or renting equipment can be a crap-shoot and blow a budget right out the window. Contractors will know the best equipment to use, and sometimes own it themselves.
You hire them for exactly the amount of time as you need.
Depending on the timeline of your project, you might need a professional service for only a short period of time. In this case hiring a contractor is almost always ideal, especially if your in-house team doesn’t have the skills or time.
They are dedicated to their clients’ needs.
As previously stated, contractors make a living working for their clients – which really is a win-win. By nature (and necessity), they take time to understand clients’ needs and problems so they can carefully formulate the best solution.
That said, there’s always the risk of finding a dud contractor… That’s why it pays to do a little research ahead of time.
You can form lasting relationships with them.
Working with a contractor for the first time will probably not be the last. Once you find someone you really trust, it makes it easier to return to them for new or repeat tasks. It never hurts to grow your professional network, either – chances are they will refer you to their network too.
It decreases the burden on your staff.
It’s possible that your team does have the capability to work on a project, but it is so far outside their day-to-day and would significantly interrupt their workflow and output. Outsourcing can greatly reduce or completely lift the burden.
You can stick to a set budget.
Contractors are used to staying on or under budget for their clients. This is another big pro in comparison to hiring in-house, where costs might be spread out to the point of not really knowing how much you’re going to have to spend on any given project.
They’re used to tight deadlines.
Contractors aren’t just used to sticking to budgets, but deadlines too. They’re used to having honest discussion about project needs before any work begins, so you will know exactly when it will be done barring complications or change in work scope.
Working with contractors can be a great experience, but it isn’t always the right fit.
You shop – constantly.
Choosing to outsource means spending a whole lot of time calling around for quotes, reading online reviews, or reaching out to your network for suggestions. Eventually you can find a set of contractors that you trust and enjoy to working with, but getting there can be a challenge.
Hourly rates can be high.
The age-old debate of flat rate vs. hourly rate is alive and well with freelancers and contractors. Any way you cut it, their hourly rate will almost always be higher than someone in-house.
You will have to manage scheduling conflicts.
Contractors are busy, too. You might need a project done, like, right now – and they aren’t available to help. They cannot always drop what they’re doing when the phone rings and you’re on the other end. If you depend on contractors, you can find yourself in sticky situations with time-sensitive issues.
Note: There are exceptions to this rule, such as emergency responders that are on retainer.
You might not know what to look for.
Before you start shopping, you might not even know where to start. First you have to find the best solution to your problem, and then finding the right person/company to handle it can be an excruciatingly tedious process if you’ve never done it before.
It can take a while to get them up to speed.
The first time you work with a contractor, your team will have to take the time to get them up to speed on your needs and specific requests. Even though knowing all the information ultimately makes them better service providers, it can be time-consuming to get them in the loop.
There is the potential for security risks.
There is always the risk of a security breech, even if unintentional, when sensitive information changes hands. As long as there is a high level of trust between client and contractor, it should never be an issue. However, if it’s the first time working a new contractor, you should discuss it with them.
You might discover some not-so-obvious costs.
Every time you communicate with your contractor via Skype meeting, phone call, or email, a lot of contractors will “log their time.” You should ask about these communication or other “hidden” costs before starting any new project.
In-House Hires or Training
There are so many great things about working with a contractor. Even so, hiring or training someone in-house can strengthen the fibers of your organization and have great long-term benefits.
You have a say in their salary and schedule.
It’s much easier to agree upon pay rate and schedule availability with someone in-house. Knowing their schedule and availability aids in business planning processes, and knowing the cost of keeping them on staff assists with long-term budgeting.
You can build upon their (and your own) existing skills.
If you already have someone on staff who could successfully take the reins on your project, it can turn into a great opportunity for you to practice your own leadership skills. As they expand on their skills, they will become even a stronger asset to your company.
In-house “stars” will differentiate your business.
If you choose to build your skill set from within, it will be another thing that sets your company apart from the competition.
Imagine this thought process: “Company X does good work, but so does Company Y – and I’ve heard they have amazing customer support.”
Even thought something like customer service can be outsourced, with a little effort you can build an all-star team from within. What sounds better?
Think of the Zappos phenomenon – you might be able to buy the same shoes from your DSW or Amazon, but with Zappos, you also get top-notch customer service. That’s what differentiates them, not necessarily their products or price point.
Skills are transferable.
If you decide to train someone on a project-specific task, chances are they will be able to apply the skills elsewhere. It may sound redundant by now, but that makes your employee a good asset to your company.
They are already invested in the company.
If you treat your employee right, chances are they are already highly invested in the company’s success. Knowing that success is within reach can be a really strong motivator for professional growth and development.
You can expect quick turnaround time.
As long as no other pressing tasks lay between your team and project, an in-house employees’ turnaround time should be relatively quick if they have received ample training. As long as the priority level of the project is effectively communicated from the very beginning, their priorities will adjust in accordance.
If you have the perfect employee in mind to develop or the perfect candidate to hire, all the above reasons can be really convincing. As with any good thing, though, there are some cons that go hand in hand with the positives.
It’s difficult to find the perfect skill set.
Without having someone in-house in mind, finding someone who fits the bill can turn into a long, arduous process. You might have to resort to soliciting on social media, spending time probing your current network, or spending money on a recruiting agency (also outsourcing). That time could just as easily be spent finding a contractor to complete the project – it just depends on your present needs and goals for the future.
You have to consider initial and long-term costs.
You might be tempted to look at only two numbers: the hourly wage of a new employee vs. rates of an experienced contractor. The latter will almost always tip the scales, probably to the point of strongly considering the prior without even thinking twice. With this simplistic comparison, you fail to consider more short and long-term costs for hiring in-house. For example, healthcare benefits and specialized training, certifications, or continuing education.
Your perfect candidate might lack enthusiasm.
Your “perfect in-house candidate” might actually be apprehensive at stepping outside their comfort zone. They’re good at one thing, and want to stay on track.
If you can’t afford the time for proper training to keep them motivated, you might be backtracking to the detriment of your project and your employees’ professional development. Never assume someone will want to take on responsibilities they didn’t sign up for. It’s always better to have an open and honest line of communication for them to express concerns.
They might lack necessary certifications.
There are a lot of tasks that are better contracted out simply due to the nature of the work itself. Take for example asbestos removal. In order to safely (and legally) remove asbestos-containing-material, there are certain trainings and certifications required of whoever does the work. If this is a one-off or really sporadic thing that needs to be completed, training an employee is probably not your best bet.
New tasks distract from existing tasks.
This is one of the biggest downsides to training an employee on something new – it will detract from the tasks they were originally hired to do. Although they may have the best intentions of effectively performing their balancing act, the truth is it’s not always feasible. There are only so many hours in the day, and a person can only be so productive. If too much is expected of one person, they run the risk for burnout.
So, what’s the right choice for you?
With so many factors to consider when deciding whether to hire or train in-house or to seek a contractor, most businesses opt for a hybrid approach. Which tasks you outsource and delegate to your team is entirely based on your budgets, timelines, and company culture.
What has your experience been with outsourcing? How about developing from within? Let us know in the comments!