Hiring in-house talent or outsourcing, which is better? They both have pros and cons. The right choice for each company depends on their circumstances and objectives.So, how do you decide which is the right decision for your business?
Outsourcing has its place in small businesses especially in areas where a short term project is to be carried out. Because funds might not be readily available, small businesses in an attempt to cut cost often prefer to hire outside consultants. However, if you as the small business owner need help long-term or have the capacity to train junior staff members, hiring an employee to become part of the team sounds like the best solution and it can save you money.
Below are some pros and cons of hiring in-house and outsourced talent that can help you make the right decision for your business.
The pros of hiring in-house
Face to face conversations can facilitate brainstorming and great ideas. This is mostly evident between employees working on the same project. When a new team member is hired, he or she will be naturally motivatedto contribute toward the company’s progress and they can bring a fresh perspective to the existing team, just as an outside consultant can.
Because intellectual property is often confidential, you can have your employees sign a non-compete and non-disclosure contract. This will give you peace of mind that your ideas and business plans are secure and safe.
Another advantage of hiring in-house is that you can solve problems ad hoc. Working in-house can help your employee have access to other colleagues and managers directly which can help tackle issues faster. However, if you are working with an outside consultant, they can only take you on if they have availability and they often help clients on a first come first served basis or by appointment. No matter how urgent your issue is, you will have to wait for your turn.
Cons of hiring in-house
Much stress is involved in finding, interviewing, and negotiating with a new employee. When any employee is leaving, the whole process begins again— and it’s not cheap.
Furthermore, providing employee benefits and perks might be required to retain top employees. Either way, you will have to pay national insurance contributions and soon even pension after each full-time employee you take on.
The pros of outsourcing
If you need specialist help, many providers are now choosing to go freelance or register as sole traders, so there is a huge pool of talent in external consultants that you can tap into; not to mention agencies.
From getting a project awarded to getting the work done, it will require much less time because it’s easy to scale your workforce comprised of external professionals. This can also help your business become more adaptable to seasonal demands. For example if you run a construction company, you will likely see more client inquiries coming in during spring and autumn months. You can then easily hire an interior painter or a furniture assembler as you receive more seasonal inquiries of this kind.
Moreover, if you outsource, there is no need to invest in equipment of employee pensions. If the job to be rendered requires specialised equipment, this is something that your specialist sole trader will already own and not another business expense for your small business. Furthermore, with the deadline for pension auto-enrollment deadline approaching in the UK, some small businesses will prefer working with external consultants for one-off projects.
The cons of outsourcing
While full time staff members often sign up for a probationary period where they can be dismissed easily, sole traders are often hired on a contractual basis and sometimes even require a deposit ahead of kicking off the project. That’s why it’s very important to be vigilant and ask for references or look at their professional reviews. Many websites, such as Bidvine.com, make these available for pontential customers.
If you are hiring an outside consultant for an ongoing project, it’s always a possibility that a bigger contract comes along and your project will no longer be their priority. Make sure to include in the contract the length of time they should devote to working on your project so that carrying out the work becomes a contractual obligation.