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3 Considerations Before Deciding To Hire Or Outsource

By Hunter Hoffmann, Head of US Communications at Hiscox Small Business Insurance

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At some point in their journey, most entrepreneurs will reach a tipping point where they need to grow from a one-person shop into a small business with extra help on board to really expand and reach their goals. If you’re reaching the point where there just aren’t enough hours in the day, should you hire some employees and create an in-house team, or outsource as many roles as possible as you work to get your business to scale?

Many businesses run a hybrid model mixing both in-house and outsourced operational support as they expand.  Although there is no black-and-white answer to this question, there are considerations to take into account that business owners can use to help decide which route is best for their business.

Here are three guiding principles to consider when you need to bring in some additional help:

1. Cost.

With an in-house team, small business owners have to account for overheads beyond just basic salary, such as taxes, social security, office space, equipment, sickness and holiday pay. Those costs don’t go away.  Small business owners need to be able to forecast future business needs as accurately as possible to balance revenues with staff expenses as they expand.  By contrast, if the work is outsourced, small business owners can set and control the budget for the outputs needed on a daily, weekly or monthly basis so expenses don’t expand quicker than revenues.  Hiring a part-time employee is another way to play it safe if you’re not sure there’s enough work for a full-time position.

2. Availability & Flexibility.

Many businesses operate on tight deadlines that can sometimes involve weekend and evening work.  Asking in-house staff to work unsocial hours can sometimes push the limits and bring unneeded stress into the workplace.  Many outsourced freelancers are already used to unpredictable work patterns. If your business runs on tight or erratic deadlines, an outsourced freelancer may be the perfect fit since many freelancers know that their extra efforts are more likely to win additional projects or receive a positive testimonial for future referrals, therefore they have an additional incentive to meet even the tightest deadlines.

But, you’ll also be competing for attention with their other clients.  Freelancers need a constant flow of clients because if they’re not working, they’re not earning.  In-house staff may have more flexibility to switch gears to focus on business priorities quickly when it comes directly from managers.   Full time employees will also gain an intuitive sense of what’s a priority that can sometimes get lost on independent contractors.

3. Expertise.

Outsourced freelancers usually aim to build a wide portfolio of relevant experience to make themselves more marketable. This means as a client, small businesses can benefit from their previous experiences and expertise in completing specific tasks. Full time employees often have to wear many hats, like small business owners, and can likely help you with a wider variety of tasks.

The decision on whether to hire or outsource will depend on the growth rate and specific needs of your business. You can help yourself decide which route to take by truly understanding your needs, the needs of your business and the needs of your clients as you grow your business.

 

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Hunter Hoffmann is Head of US Communications at Hiscox Small Business Insurance and is responsible for media relations, social media, internal communications and executive messaging. Hunter lives in New York City with his wife and two sons – Walker and Otis. In his spare time, he moonlights as Chief Marketing Officer and deliveryman for Junior’s Fresh, a fresh baby and toddler food delivery service and cafe in New York City founded by his wife, Michelle.

 


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