Hiring In-House or Outsourcing? Which One Is Better?

By Linda Binklage

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Organizations have always struggled with trying to find the best hiring practices to find employees that suit their needs. With the stunning growth of the “gig economy” more and more businesses are considering the use of contract or freelance employees to meet their needs. While there are many advantages to hiring freelancers, there can also be disadvantages. But the same can also be said for full-time employees. So how do you choose?

What are Your Needs?

The primary factor in deciding whether to hire in-house or to contract a job out will be the needs of your company. Are you looking for a one-time software installation project or a long-term data analyst? Evaluate whether your project is something that will be completed in a short period of time or if there will be an ongoing need. Many freelancers and contractors are also willing to contract out retainer services so that you can keep working with them long-term. This is especially useful if you need a specialist, but only for 8-10 hours a month. If you’re having trouble finding quality talent, outsourcing can help you get the expert you need for a short-term project.

What Can You Afford?

Is your company able to provide a full-time position with benefits and everything that goes along with it? If not, you may want to stick with a contractor. On the other hand, depending on what you need to be done, contractors can be extremely expensive. Part of the reason is that they need to build the overhead costs of looking for jobs and other administrative tasks into their hourly rate. They might only be “working” on projects for 30 hours a week, but they’re also spending 10 hours communicating with clients, handling their billing, and reaching out to find new work. Their prices may be higher, but then, if you’re only paying them for 10 or 20 hours’ worth of work, it may work out for your benefit also.

Are You Flexible?

Do you need an immediate response to issues? In that case, you might be better off hiring in-house, as employees are going to be available during their scheduled shifts. With contractors, they often look to freelancing to afford them flexibility for travel or personal reasons. They might be out of the office for weeks at a time if they have no current projects and can sometimes be hard to get in touch with if there is a problem. If you’re not likely to have any urgency and have clearly defined deadlines, say for writing an annual report for investors, you should have no issues using a contractor.

Can You Be Patient?

When working with freelancers, you are generally not their only client. And they will often prioritize the work that they do based on how much they value the clients. Factors that determine this value are how much they’re being paid, are they likely to have future work, or are they, long-term clients. If you’re just starting with them or have negotiated their rate down a bit, you’re probably not going to be at the top of the list, so a project that should only take 4 or 5 hours might not get done for several days. If you want things done right away, you may want to stick with an in-house employee that will prioritize their work according to what you want, not their own needs.

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