Should You Outsource Or Hire In-House? Which One is Better?

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Getting a business off the ground is always challenging. There are so many decisions that have to be made and risks to be taken. When I first started my business, I naturally kept my manpower to a minimum since I was still starting then. But when the business grew and there were more things to do, adding more people to the team was the only logical thing to do.

When I first started hiring, I have to admit that I initially started with in-house team members. However, that was before i have discovered the beauty of outsourcing. In hindsight, I want to know which the smarter move is – to hire in-house or outsource? Here are some questions that will help you come to a decision whether you should outsource or hire in-house.

1- What Will Your Incoming Team Members Do?

First, determine what your prospective team members will be doing for your business. Will it require working with you closely or can they do it on their own with minimal supervision? You have to determine the tasks you will assign to them because it defeats the purpose of hiring someone if you will be taking more time instructing if they are away from you. On the other hand, if you hire someone in-house and the tasks they do require minimal supervision, they might feel stifled by your presence.

2- How Long Will the Partnership Last?

One thing you should keep in mind when hiring is that you are not just looking for people who will work for you. Remember that you are not just paying them to do things for you. You are seeking their assistance to help you grow your business because you cannot do it all on your own. You have to know if this partnership will be long or short-term, so your prospective employee will know what to expect. Usually, if it is a short-term task, like a special project, I would lean towards outsourcing; but, if it’s a core business process that needs to be done and will definitely be done long-term and regularly, probably something like accounting or inventory, then hiring in-house is the better option.

3- Can Your Current Team Still Handle It?

For some, they may have an existing team in place and they are planning to add more members. Before you do so, you have to talk with them honestly and intently if they can still handle what’s on their plate. Please tread lightly as some of them might take this personally as if they are not doing their jobs well. They might also think that their jobs are hanging in a balance and they can lose it anytime. There is no need to cause unnecessary worry and stress to your current team members. Be upfront with them and let them know about your plans before you actually act on them. Inform them kindly that you see the need to add more hands because the business calls for it. Tell them that it is for the good of the business and the sanity of everyone.

4- What Will Be Your Current Team’s Role?

Whether you decide to outsource or hire in-house, your current team (whether it’s just you and two other people) will take time to accommodate them. You have to know what they can do to ease the new members into the process. Will they train them? Or would you rather train the newbies? Whatever role they play in onboarding the new team members, always remind them to be nice, help and answer questions directed to them, and provide accurate information. The current team and new team members should work hand in hand to achieve the goal – and that is to bring your business to a higher level. There is no need to compete with each other, only work together.

5- Will Hiring Help You Reach Your Goal Faster?

Let’s revert to question number one: What will your incoming team members do? Let’s say, you are looking to hire someone who can write and maintain your blog. Some people think this is an easy task, but I am telling you writing this entry has got me wracking my brains already. Writing a blog is not easy and it requires dedicated hours of research, arranging information, and weaving words together. This affects the performance and efficiency of your current team hence it led you to get someone onboard that would dedicate his time to blog writing and maintenance. In this case, hiring someone will definitely help you reach your goal faster.

6- Will You Invest for Your Employee’s Continuous Learning Development?

Let’s face it – nobody knows it all. Nobody’s good at everything. I mean, even Achilles has a heel. That being said, you need to recognize that some people in your employ (It doesn’t matter whether they are in-house or outsourced) will need further training to do everything you need perfectly. If you have the capacity to do this, but you are still on the fence, I am telling you: GO FOR IT. Be generous with information and learning opportunities because your employees’ growth is tantamount to your business’ development. The money that you spend on training can eventually pay for itself through the results your employees give you. I admire businesses and companies that encourage learning because it means that they not only want to grow their business but their people as well.

7- Do You Have the Resources to Employ In-House?

Truth be told, employing in-house is more expensive. You put them on payroll and pay their government-mandated contributions, health care, and other benefits. It’s almost as goods employing a full-time employee, whereas outsourcing means you only pay your contractor’s fee and that’s it. Outsourcing is cheaper than hiring in-house, but I would like to reiterate that outsourcing is not always the best way to go, especially if you are looking for someone to perform a core business process. Employing in-house will also give you the advantage of seeing your employee face-to-face and eliminating time difference and delays in responding that is a common problem in outsourcing.

8- Are You Getting Your Money’s Worth?

Before you decide whether to hire in-house or outsource, do the math. Sometimes, when you outsource, you get the services of an entire agency against hiring in-house and obtaining the service of just one person. So, you have to know what you are getting for the corresponding fee that you are shelling out. Be wise with the money you are going to invest. When you commission the help an outsourced agency, it might be more expensive, but if you get the service of an entire team with a specialized skill set and can deliver, will you really question their fee?

9- Are You Ready to Outsource?

Just like question number 7, you also have to be prepared with the things you need to do when you outsource. Outsourcing can demand more time and communication between you and your vendor. Establishing a stable workflow can also take time, but that doesn’t mean things cannot be done through outsourcing. Just make sure that you have the necessary work and communication tools to make sure that your goal is achieved as soon as possible.

10- What Is Your End Goal?

You want to hire in-house or outsource because you have goals for your business. Before you even start the hiring process, this is something you have to know clearly because you cannot steer your new employees to the right direction if you do not have a clear vision of what you want to achieve. Your end goal will be the determiner of the success of your partnership – it does not matter whether they are in-house or outsourced, because it will all boil down to how you maintain connections.

Outsourcing or hiring in-house is a big responsibility. For me, it means that there are lives depending on me. My contractors or employees rely on me to put food on their tables or a roof over their heads. If you are on the fence about taking on new team members and unsure of your business status and income, I strongly discourage you from taking on new employees. One wrong business decision can affect lives.

I would also like to emphasize that hiring in-house or outsourcing should not affect the way you treat the people who are working hard to make sure that your business becomes successful. Oftentimes, we think that they are paid to do their jobs, but we must always remember that the blood, sweat, effort, and all the hard work our employees do for the company is crucial to success. We can pay their time, but I would pay them more if I could.

I hope these questions help you make the right decision whether you should outsource or hire in-house. If you want further guidance on how to proceed with this major fork in your business, you can visit Outsource Accelerator for more relevant tips on hiring in-house and outsourcing.

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Derek Gallimore is fervently passionate about business and outsourcing and is on a mission to help others with their outsourcing journey. Derek has been in business 20 years, outsourcing six years and based in Manila, Philippines – the world’s outsourcing capital – for over four years. Derek Gallimore owns Outsource Accelerator, a multi-product platform designed to educate, support and advise companies who are interested in outsourcing.