Many companies are saving money by outsourcing instead of hiring in-house positions. How does outsourcing work and when does it make sense?
What is outsourcing?
Say the word “outsourcing,” and most of us think of giant companies who, in order to save money, hire workers from overseas to take care of customer service or other logistical tasks, or to manufacture a product. But anytime you hire an independent contractor or temporary worker to support your business or perform a one-off task, you are outsourcing. Often it saves money, but there are other reasons to outsource, too. Here are some reasons you should outsource, and some times when you shouldn’t:
When to outsource?
When you can get a better result: Successfully running a business means knowing your strengths and knowing when to tap somebody else’s skillset. If that person isn’t on your payroll and the need is not ongoing, consider working with an outside expert.
When there’s a need: Maybe you have an ongoing need for somebody to manufacture your product, but there’s nobody in your city who can do the job. It may or may not be the best long-term solution, but it makes sense to outsource when the need can’t be filled locally.
When it’s a logistical task: Certain things (like payroll, accounting, etc.) are just part of doing business, and if there’s a solid option that’s not going to negatively impact your operation, hire an independent contractor.
When you hate the task: Why be your own boss if you can’t choose to focus your efforts on what you love to do most? You may be great at project management, but if your passion is in the creative arena, hire someone else to take care of the business end.
When you’re on a deadline: If your business is growing at a rate you can’t keep up with, it may be necessary to bring in outside help so you can keep your customers happy without rushing the process of finding great employees. Try a temp agency to get you through a deadline.
When it’s a short-term project: Whether it’s a website or a few more workers during your busiest season, short-term and/or one-time jobs should probably be filled by temporary, independent contractors.
When Not to Outsource
When you need to know the details: If you need to be involved in the nitty-gritty details or keep an eye on daily progress, you may want to consider keeping your workers on-site.
When you want their attention: Independent contractors by law must be able to make their own schedules, and usually they are handling more than one project at the same time. If you need a staff member to work at certain times or want to require that they focus on your company, you probably need to hire them as an employee.
When it’s a long-term investment: Even if the job at hand is not directly implicated in your mission statement, having support staff who knows and cares about your business makes a big difference to the health and success of your company. If you have a need that isn’t going away, consider making those workers a real part of the team.