Trying to decide whether to outsource a business function or do it internally? If so, asking these questions will help you determine the right answer.
Do you have expertise?
If you don’t know the first thing about the business function in question, hiring a person to manage it is risky. First, you don’t have the ability to train or mentor the new hire. Second, you won’t know whether the new hire is doing a good job or a bad one. On the other hand, if you outsource the function – assuming you carefully vetted the firm or individual – you obtain instant expertise and reliability. In addition, that firm or individual can train you, making hiring someone for the job function down the road feasible. Still, there is one other item to consider in this equation …
Is it a critical job function?
There is risk, and then there is RISK. For instance, handling accounting functions internally when you’re clueless about accounting could put you out of business or in jail. On the other hand, hiring a person to manage your Twitter and Facebook pages when you’re clueless about social media probably won’t set your business back too far even in a worst-case scenario. So, if you are comfortable with a long learning curve and don’t see a catastrophic downside, hiring is back in play.
Is a known quantity available to hire?
Hiring a stranger to manage a business function, critical or not, carries a great deal of risk. A lot of people interview well or present with an impressive resume, but those are no guarantee a person can walk his or her talk. In contrast, if you know nothing about, say, accounting, but have a close friend who is an accomplished CPA, that person could be a solid hire. Why? Instant trust.
How much work is involved?
Is the business function a 40-hour a week job, or a 40-hour a year job? Nothing is more aggravating to a business owner than seeing employees with time on their hands. But often, when considering an outsourced contractor versus a hire, owners are less than thorough in determining the specific job scope and time requirements. Since outsourcing tends to be less expensive than a direct hire (no benefits, no training costs, and paid only for work done), go with the contractor unless you’re sure you have a full-time position. If the workload expands, you can always hire someone later.
As you can see, there are options for you to get the skills and expertise you need, and if you go through this process and ask yourself the right questions, you will come up with the right solution for your business.
Over to You
What tips do you have for deciding whether to hire an employee or rely on an outside contractor?
