Is it Better to Outsource or Do a Direct Hire?

John Krautzel
Posted by

There comes a time when every growing business needs to decide whether to hire new employees or to outsource in some areas. Small businesses with tight budgets often think the obvious solution is outsourcing to avoid the upfront costs of a new hire and have competent specialists handle the needed areas. Unfortunately, the decision is not that simple. Take a deeper look at your particular business needs before making a quick choice you might regret.

Hire for Critical Tasks

Some tasks are core tasks that are essential to your growing business. In many cases, this is obvious. For example, carpentry is a core task for a handmade furniture business. Other core tasks are not as obvious. If the same carpentry business does all its selling online, everything from social media marketing to maintaining technology may be just as important to the success of that enterprise. In general, critical core tasks need to be completed in house. This gives you tight control over those areas so your growing business keeps its competitive edge.

When considering core tasks, hire employees who are passionate about their fields and interested in your line of business. These quality employees become invested in your success as they grow with your company. Invested personnel offer up determination, innovation and consistency at a level that an outsource company is unlikely to provide. If you need someone for a particularly specialized area, take a look at your current staff before hiring or outsourcing. As a growing business, you probably have employees whose talents go beyond their current work assignments. If this is the case, consider expanding a current employee's role into the new area to delay the need to hire or outsource.

Outsource in Noncore Areas

Consider outsourcing mundane tasks, such as custodial work or IT support, when they're nonessential to your business. Many companies that do business through diverse channels choose to outsource digital content management, website building, editing, large print jobs and other tasks that improve their business but are not essential. Also, any noncore area that you don't have enough knowledge to do in-house is another possible outsource opportunity. For example, if your growing service business wants to start selling products as a way of advertising and building interest in your service, outsourcing the product production makes sense. Your current staff probably doesn't have the expertise to manufacture goods, and since that area isn't core to your business, outsourcing is your best bet for speed and success.

Likewise, when debating outsourcing versus hiring, think about how much work needs to get done. Hiring a worker for a job that only takes 10 hours a month isn't a cost-efficient move for a growing business. Instead look toward outsourcing opportunities for small tasks that you're unable to accomplish with your current employee load and capabilities.

Most importantly, be sure to look at your own unique business requirements when debating outsourcing versus hiring. Don't try to emulate what everyone else is doing. You know your growing business the best, so analyze the pros and cons of each area with an eye to your company's competitive edge, current employee base and anticipated future needs. Then, move forward confidently with job postings or a search for a great outsource company or freelancer.

Photo courtesy of Stuart Miles at


Become a member to take advantage of more features, like commenting and voting.

Jobs to Watch