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Small Business Decision Making: What to Keep in House and What to Outsource

Small Business Decision Making: What to Keep in House and What to Outsource

One of the best things about being a small business owner during the digital age is your ability to make connections with talented professionals online. From networking to freelancing, the internet is really your oyster when it comes to improving operations, quality, and efficiency.

But how do you choose when to leverage outsourced talent and when to keep positions in-house? In this post, we’ll serve up some tips to help you navigate these tough decisions for the best outcome for your small business.

What Kinds of Roles Can be Outsourced?

Thanks in part to the growing “gig economy,” the opportunity for outsourced work is greater than ever. Gone are the days of clocking in at just one office on a 9-5 schedule, almost anyway. Instead, the U.S. is now home to an estimated 56.7 million freelancers looking to contract for your business.

These freelancers run the gamut in background and expertise, from graphic design to financial account management. Some of the most commonly outsourced small business roles include:

  • Accounting
  • Marketing
  • Sales
  • IT
  • Administrative work
  • Customer service
  • Manufacturing
  • Research
  • Human Resources

Depending on your business’ niche, you may also be in the market for creative talents, such as, graphic designers, video editors, influencers, and copywriters. Thanks to freelancer marketplaces such as UpWork, Thumbtack, and Fivver, these talented professionals are easy to find!

Should I Outsource?

Before you dive into the gig economy’s online marketplace and start sifting through samples and resumes, ask yourself if you’re in the position to hire for an outsourced position in the first place. 

Reflect on these questions to get a jumpstart:

  • “Which responsibilities are my biggest pain points?”
  • “How much time do I spend on these tasks, and how does that compare to an outsourced expert?”
  • “Would this be a full-time or part-time position?”
  • “Are these extra responsibilities cutting into my other core tasks?”
  • “Do I have in-house employees who can take on these responsibilities?”
  • “What is my budget?”
  • “What’s the cost difference for hiring an outsourced or in-house expert?”

Once you’ve had a chance to consider these questions and how they fit into the context of your small business operations, you’ll be in a better position to make the optimal decision for your business.

Pros and Cons of Outsourcing

Like any big decision you’ll make for your business during its tenure, you’ll likely want to think about the many benefits and drawbacks that each option will offer. Of course, hiring someone outside of your circle will cost some cash ($4,129 on average) so you’ll want to be sure that you’re getting the most bang for your buck.

The main benefits of outsourcing roles include:

  • Greater access to global talent and expertise
  • Gives you time to focus on your core services
  • Improved in-house efficiency
  • Cost savings
  • 1099 instead of W-2 means no payroll taxes for your business
  • High-quality talent may expand possibilities and improve quality

Some possible drawbacks of outsourcing are:

  • Limited control on operations
  • Confidentiality risk
  • Less investment in internal talent
  • Workers are not on site

Pros and Cons of In-House

While outsourcing offers several unique benefits for your small business, so do in-house positions.

Some of the positive aspects of in-house positions include:

  • Hiring internal talent is an investment, and so these employees are more likely to buy into your business.
  • By hiring an in-house employee, they’ll be able to get more familiar with your business’ workflow, communications, caliber of work, etc.
  • More visibility into project deadlines, project management, etc.

This ice cream shop has a pretty delicious display on their Instagram page, filled with daily specials, customer photos, and more. Our guess is they opted for in-house social media management because it’s easier to have someone on-site taking product photos rather than coordinating with someone off-site to keep accounts updated. 

In addition to these benefits, hiring in-house talent also has its potential drawbacks, including:

  • Can be more costly for your business, especially with payroll taxes and benefits accounted for.
  • Recruiting pool is more limited when hiring for in-house team members, so finding top-notch talent can be a challenge.
  • The hiring, training, and onboarding process may take more time upfront, and can be costly if your industry has high turnover.

Best Practices for Hiring Outsourced Positions

Whether you hire in-house or outsourced, there are hiring tips you should certainly keep in mind — many of which can be applied to either type of position! Below, you’ll find a few best practices you can use to help you hire the best outsourced talent out there.

Use filters to narrow your search

Most freelancing platforms have filters that allow hiring managers to tailor their results and effectively narrow down the talent pool to meet their exact prerequisites. This can help you save time looking through potential candidates that don’t fall within your budget constraints, don’t have the experience you need, etc.

Always look at samples

A resume can hit every mark on your desired experience list but when it comes down to it, the only way to see how these skills are put into practice is to take a look at work samples. This is especially key when you’re looking to outsource work. Most freelancers will have a portfolio readily available, so make sure you take advantage — this will help you ensure you hire the right person for the job!

  1. Set expectations upfront

Communication is key in any role, but even more so when you’re coordinating with a contractor that’s working off-site. Because you’ll have less visibility and in turn less control, you’ll want to be sure that your expectations are crystal clear from the start. Always define project scope and deadlines, business communication standards, and caliber of work before moving forward.

Final Notes

Deciding whether you should hire in-house or outsource ultimately comes down to the specified role, your budget, and needs. Both options have their own benefits and drawbacks — outsourcing tends to be cheaper while in-house is more expensive and gives you more visibility and control than outsourcing would. As your organization debates which hiring decision makes the most sense for you, make sure to keep these questions, pros and cons, and best practices in mind.

What’s your experience hiring outsourced team members? Share your thoughts with us in the comment section below!

Author’s BIO:

Samantha Rupp holds a Bachelor of Science in Business Administration and is the managing editor for 365businesstips.com. She lives in San Diego, California and enjoys spending time on the beach, reading up on current industry trends, and traveling.

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