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When it comes to getting things done in the workplace, a sure bet is to have the best executors at the best price. Hiring staff is a critical step in getting the right people on your team. You could either hire a full-time employee or outsource to a person or company, that can get the job done. Deciding on the best option for your business, will depend on several factors, such as the following:

1. Presence of Expertise within the Organization

The presence of the needed expertise within the organization, is a crucial factor in determining whether to outsource or hire in-house. A basic, simple rule is to consider outsourcing if you lack the desired expertise. For instance, it makes sense for a small or young business to look for an outsourced bookkeeper or even an outsourced CFO if they do not have someone with accounting knowledge on their team. For a small business trying to get traction in the marketplace, it would be a waste of resources to hire a full-time accountant. This is simple economics!

2. Maintaining Control of Essential Business Functions

Another important factor to consider, is whether you want to maintain tight control of your essential business functions. For instance, it is important that you keep tasks related to your business’ competitive advantage in-house. Outsourcing essential functions, may mean your business is fully reliant on outsourced help to remain functional. This can be a risky proposition, especially in a competitive market.

When making hiring decisions, avoid outsourcing anything that is part of your core business. If your business is in the IT sector, it would not make sense to outsource the company’s IT tasks. Even though businesses usually outsource IT responsibilities, IT companies need to have full-time employees for any IT-related tasks. Outsourcing these tasks would mean that the company is most likely diluting its competitive advantage, a big mistake.

3. Consider Business Risk Factors

The risks of the business and associated needs play a critical role in defining what to outsource and what to hire in-house. These are often unique to your business, so should be carefully considered. In making these decisions, you need to determine both the pros and cons of each hiring option.

If you decide to hire full-time, it follows that they should be committed primarily to your company. You can set their priorities, commit them to your goals, and establish acceptable workplace behavior.

On the other side, outsourcing means that the hired expert will likely prioritize on their own goals, not yours. While you may manage your expenses when working with outside help, you rarely (and legally should not) have total control over them.

When Should You Outsource Vs. Hire Full-time

Ultimately, the decision to outsource or hire full-time depends on the nature of your business, what you want to achieve, and how quickly you want to achieve it. Certain situations fit better with outsourcing than others. This includes situations where you are not sure whether the work will continue after an initial project is completed.

Outsourcing is also ideal for smaller businesses entering the marketplace when the outsourced function is not a core competence of the business strategy, or business model, that gives the company its competitive advantage.

Similarly, certain circumstances are logically more geared toward hiring full-time. For instance, the function in question is a key business competence — the reputation and brand must be protected carefully and vigorously. Some companies have a specific work culture where everyone understands what they are required to do and find a way to contribute and adapt to new situations. This type of situation will drive better economics overall with full-time hires.

Lastly, and perhaps obviously, hiring in-house is almost always the right decision when the activities involved are trade secrets or related to other intellectual property, that could damage your business if made public.



Dan Lucas
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