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Hiring In-House vs. Outsourcing: How to Make the Right Decision

As you build your startup, you’ll quickly realize that you can’t do everything yourself. You’ll need other people to handle the overflow work you don’t have time to get to, and dedicated experts who can tackle the fields that are beyond the limits of your knowledge.


When that time comes, for most applications you’ll need to make an important decision: will you hire someone in-house to handle this new set of responsibilities, or outsource to an external firm or independent contractor?

There’s no clear answer here, because every situation is different, but there are a handful of considerations and variables that can lead you to make the appropriate call, no matter what.

Risk and Safety

First, you’ll want to consider whether there are any risks or safety hazards involved in these responsibilities. For the most part, trying to do the work yourself, or hiring someone in-house will keep you accountable for whatever happens. Hiring an external firm will not only guarantee the work is executed by more experienced professionals, but it will also put the burden of accountability on them.

For example, if your garage door isn’t working right, it’s often better to call someone in, so you don’t risk making the situation worse, or hurting yourself in the process of applying a repair. The same is true for handling complex marketing strategies like SEO; it’s not worth risking a penalty if you aren’t sure what you’re doing.

Demand for Expertise

Next, you need to consider the demand for expertise within the job you’re looking to handle. Outsourcing will likely give you access to a broader spectrum of experts; when looking for an independent contractor, you can find someone who specializes in the exact work you need to have done. When working with an agency, you’ll have access to an entire team of dedicated professionals. If you try to hire someone in-house, you might be limited in what expertise is available.

For example, if you’re trying to build a website from start to finish, it’s often better to work with an agency that has professionals for every step of the process than to hire a single person who may only specialize in one category.

Volume and Consistency

You should also consider the volume and consistency of the work coming in. If this is a one-time responsibility, it’s usually better to have an independent contractor handle it, so you aren’t burdened with ongoing costs to keep someone around. On the other hand, if you know these responsibilities will be recurring, and in significant volumes, it might be more cost effective to have someone on your team permanently.

Cost and Budget

Obviously, you’ll also need to consider your budget, and the costs of an in-house hire versus outsourcing. In general, you’ll find the least expensive option is to hire an independent contractor. Then, you might think the next-least-expensive option would be to hire someone in-house, since agency rates run in the thousands of dollars a month. However, considering the access and services you get for the money, many agencies are far more cost-efficient than hiring someone. You’ll have to do the math on this one yourself, but also keep in mind the secondary costs of hiring, such as benefits, recruiting costs, and replacement training costs.

Control and Flexibility

In terms of control and flexibility, you aren’t going to find a better option than an in-house hire. Unlike when working with an agency, you’ll have complete control over the person you bring onto the team, ensuring a perfect fit in both company culture and skills or abilities. You may also use that person however you like, blurring the lines between areas of expertise, in ways that a contractor or agency may not tolerate. And if things don’t work out in your intended position, you may be able to transfer them to another position without much time or effort.

The Bottom Line

Every situation is unique, so there’s no single answer for whether hiring someone in-house or outsourcing is the right way to go. But if you look at the risks involved, the expertise needed, your desired levels of control and flexibility, and your budget, you should be able to land on one side or the other. While you’re in the decision-making process, don’t discount the idea of trusting your own personal preferences and instincts; this is your business, and you should build it the way you think is best.

Author : John Rampton

John Rampton is an Entrepreneur, Writer, Full Time Computer Nerd, Founder at Due. Follow me on Twitter @johnrampton

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