Why is this Important ?

Today I am here to talk about an almost obligatory question. which every small business owner in most isles of business will have to ask themselves at some point or another, and that is : should we go with hiring or outsourcing, and what does each one connote?

Now in the world of business, choices such as this one could mean a lot of things, good and bad. a bad example of the result of this is ruining the business reputation, and to be less dramatic the loss of an important client. But a good example would be smooth growth, and acquiring the long term loyalty of your clients. now let’s dig a bit deeper shall we.

Pros

Hiring

When it comes down to hiring, one of the biggest pros is the human interaction and doing the vetting process face to face. this allows a bigger room for negotiation, and gauging the level of investment the candidate will have in his role, or the project which he is being hired for.

Going past the interviewing process, one of the other Pros of hiring is confidentiality. since hiring means the work will be kept in house, the risk of any critical information or ideas leaking is extremely low. This will allow for more chemistry building and a synergistic workflow.

To add to the list of pros, hiring in house allows for much faster response time when trying to find solutions for issues requiring immediate attention.

Outsourcing

When it comes to outsourcing one of the biggest, if not the main selling point is the abundance of freelancers, which is allowed by the great number of freelance platform such as ​Upwork​or freelancer.com. This makes it ideal to find the right workforce for short notice projects.

Another attractive aspect of outsourcing is the lack of association between the costs of tools necessary to do the work and your business. Meaning any costs related to doing the actual work ( buying or renting tools ) will be fulfilled by the freelancers or the outsourced agency. Completely avoiding unnecessary costs other than the fees of the freelancer or agency hired.

In addition to that, there is one more benefit which I think could be industry specific. This benefit is the ability of going 24/7 providing your services nonstop. By taking advantage of the different time zones and work hours. You can hire agencies or individuals operating outside your usual working hours. Keeping the work going even when the office is empty.

Cons

Hiring

Now coming back to hiring. It only makes sense to go over the cons after mentioning the pros. Starting with the first and most immediate drawback, which comes to the minds of all business owner and mine too. That is the time and money associated with the hiring and employment process, Which can differ from one country to another. But in general includes expenses such as setting up meetings and interviews ( both consuming valuable time ) in the hiring phase. Making it an ongoing time consuming process for every applicant and interview you go throw.

Then comes the legal fees such as insurances and benefits. In some cases a residency permit is required too. Even with hiring a single employee, these expenses can still pile up, and become extremely costly depending on where you operate from.

So far the issue is only financial and time related. But if we look deeper into the synergy and workflow of the human resources or staff within most businesses, we notice that new employees are the least efficient, and the least utilized. Which surely can be solved with some time and training. But depending on the workforce your business requires, you may not be able to afford this time. Making it unbeneficial for short term needs. Which is where outsourcing shines and proves beneficial. but would that be the case for the long run ?.

Outsourcing

Onto the cons of outsourcing. When it comes to outsourcing -as I have mentioned before-, the market being global, brings a lot of benefits, but with the market this big you can’t avoid some issues when it comes to communicating.

And since most of the agencies or freelancers today are contracted online, a great deal of them put up and share wrong info or exaggerate their capabilities and previous accomplishments. This can cause you delays due to the inexperience of the individuals hired. And in some cases coming out in the end with inferior results comparing to the standards of your business.

Adding to the list of issues that could arise from outsourcing. The concern of information leakage. Which can be detrimental when it’s related to future announcement, legal matters or revolutionary new ideas.

The connection to growth

When it comes to growth. I myself have always correlated growth and hiring, and taking on bigger business deals and clients. In the process of acquiring more work you need more staff to keep up. This meant growth to me ( bigger clients, bigger workforce, rinse and repeat ) now here’s the thing, what i just described before is neither totally correct or incorrect.

Hiring and outsourcing are a big part of growing your business. So when we ask the question about hiring or outsourcing, we should keep in mind not just the short term consequences but also the long term consequences too. which can be growth.

Taking into consideration all the pros and cons of both. We can attempt to answer the question we asked in the beginning. of course we can’t expect the answer to be constant for every business, or in any period or certain point of the business’s existence. But keeping the observed pros and cons can, nevertheless, help you have a wider view when making the right decision for your business.

How would this work in real life ?

Well, let’s come up with a hypothetical situation. And we can try to figure out what is the right answer or choice of action in this situation, growth wise. let’s say we are a five man team. Recently we landed a bigger than usual client. For an estimation let’s say he require an amount of work that will require a team of eight people. And we can assume we are given a flexible timing. Keeping in mind all the details mentioned before. The way to go would be outsourcing even in the case of no urgency. As the new client being our first client of that caliber, he does not assure us the constant necessary stream of cash, that will be enough to support the growth in staff. The right choice would be to start off with outsourcing and move to a combination of both. After seeing a constant flow of clients of this kind

the kind that would require growth in our staff and man power ) that’s when you go full on hiring and expanding the staff.

Fifty shades of human resources

The hiring or outsourcing question in itself is very black and white. Hopefully most of us know that we live in a mostly gray world. so the only way to go about answering the question whenever it arises is to keep in mind the pros and cons. and put them next to your current needs and the requirements of your business to find the right combination, that serves the bigger picture.

We in Spherical mind , Can’t deny how useful outsourcing is to us. At this point we have a very vivid understanding of the methods and best practices of Outsourcing

and how to make the most of it, while maintaining a standard of quality for our clients. We’ll certainly share our tips and tricks with you , But that would be in a different article.