bars
Considering whether to outsource or hire in-house?
It's a substantial decision, but making the right one, can save you time and money, and improve your productivity. Alternatively, making the wrong one can significantly hurt your bottom line.
If you're an HR executive or another senior executive with hiring authority, carefully consider several factors to determine whether a permanent employee (full-time or part-time) or freelancer is right for your business.
Carefully assess the scope of the work for which you're seeking talent. Freelancers are better suited for short projects that have specific deliverables, which can be performed with relatively limited direct supervision. Freelancers can also provide you with skill sets your company lacks, allowing you to minimize routine business mistakes and save time developing staff expertise in an unfamiliar area.
On the other hand, if you need someone to work on complex, long-term projects, involving multiple departments, having employees in-house for regular, in-person meetings and discussions, is the way to go.
You can also cross-train employees in different areas, which can not only help increase productivity but also help you develop staff capable of stepping into leadership roles when vacancies occur.
Consider the sensitivity of the work you need to complete as well. It's often harder to thoroughly vet freelancers, especially those who live overseas, than local candidates.
Generally, it's best to keep confidential tasks, especially those involving intellectual property, among in-house staff, who have presumably undergone a more extensive vetting process. And if you do hire a freelancer from a foreign country who does leak confidential information, you may have less legal recourse available to you then you might have under local laws if a full-time employee did the same thing.
Looking at just the numbers, full-time employees are more costly than freelancers. It's more expensive to search for full-time employees who match your needs in terms of both skills and culture fit than to use an online platform like Upwork or Freelancer to find talent.
It's easier, and less expensive, to drop a freelancer than it is to fire a full-time employee, considering onboarding and search costs. You'll pay a freelancer an hourly or project-based rate – far less than you'll pay a full-time employee for their salary and benefits.
Finally, the cost of hiring full-time overnight staff can be exorbitant. However, if you hire freelancers in multiple time-zones, your business can affordably operate outside the standard eight-hour workday.
However, while the financial costs may be more significant for full-time employees, there are other reasons to favor full-time employees over freelancers. Engaged full-time employees working on-site can develop revenue-generating insights and cost-savings measures that freelancers usually can't. Full-time freelancers must continually bid for new projects to support themselves.
As a result, they may prioritize projects for companies over yours, resulting in delayed deliverables or poor-quality work. Alternatively, you have and can exercise more control over a full-time workforce with stable incomes than an outsourced workforce.
Your decision should not be made based on financial costs alone. Perform a cost-benefit analysis of the merits of each type of hire, including short-term and long-term projections and assumptions. There is no one-size-fits-all hiring solution for businesses, but carefully considering all of your needs, costs, and risks can help you make the right decision.