Outsource or Hire? How to Decide What's Right for Your Business


When hiring employees, you have more options than you may realize. Not every position needs to be in office, full time or part time. In some cases, outsourcing some of your staff may give your business exactly what it needs.

Before you start planning your outsourcing strategy, you should think about what positions you need to fill, and what kinds of jobs are typically outsourced. Hunter Hoffmann, head of U.S. communications at Hiscox insurance, said that the positions typically outsourced include customer service, marketing and social media management, sales (through contractors), and IT systems (via the cloud).

So what are the benefits of outsourcing? First, it may give your budget a break. Hoffmann said that with outsourcing, you can set and control the budget for the tasks you need completed. By contrast, with in-house employees, you have to account for overheads that go beyond their basic salaries. Outsourced staff members are also used to working on tight deadlines, so they're more likely to work weekends or odd hours to get things done, Hoffmann said.

Outsourced employees are more flexible, too, as they don't get paid holidays or sick leave. They also feel more pressure to get things done so that they can find more work, Hoffmann said, whereas in-house employees get paid regardless of when a project wraps up.

And since outsourced freelancers work with many different clients, they usually build a wider portfolio of experience to make themselves more marketable, Hoffmann said, noting that employers can benefit from these varied experiences.

Of course, outsourcing involves some obvious risks that employers should keep in mind, too.

"You have more control over full-time employees than contractors and freelancers, because they're committed primarily to you and your company. You're able to clearly set priorities, establish acceptable workplace behavior and, hopefully, get them to commit to not only their success, but the company's as well," Hoffmann said. "With freelancers, you could end up competing for their time with other clients, and the work effort contractors put in can often wane towards the end of their term if they know they're not going to be extended."

While outsourcing your employees can be risky, hiring full-time employees doesn't always guarantee success, either. The biggest issue is that you may not fully utilize full-time workers, Hoffmann noted.

"An employee is a fixed cost that can be a big challenge for a small business with fluctuating revenues.  Businesses can manage their expenses in close to real time with contractors and freelancers to adjust to demand in a way they can't with full-time employees," Hoffmann said.

If you're considering outsourcing for your business, Hoffmann said you need to make sure your insurance is on board with it.

"You should check your professional liability insurance policy to ensure that not only employees, but [also] independent contractors and temporary employees are covered for any claims arising from business-related services they perform on your behalf."

Originally published on Business News Daily.