It’s amazing how many businesses are so adamant about managing everything in-house. It is a common modern-day business dilemma where the need to have someone in house isn’t as necessary as it was previously. This is because there is such a demand for skillsets and the ability to deliver rather than to have a large amount of staff in-house. An organisation can grow to a great size with strong scalability if managed well with an outsourced team. Ideally, the same type of structure should be manageable with an in-house team. There are TAFE courses that discuss the approach to managing both staffing methods in business modules. Below, we take a look at some of the benefits and considerations that business owners should have when they are deciding to outsource or to have in-house team members.
The human resource cost.
It is amazing how much it costs to hire a person into an organization. There are quite a lot of overheads that come into it, along with the salary that is provided to the employee. Businesses need to consider the cost of the equipment for their workstation, the cost of the office space and energy costs per person. Other considerations include loss of business associated with staff holidays and sick days. There is also the time allocated to staff meetings and the need to boost employee morale. Furthermore, should you need to get rid off an unproductive employee, it may prove to be costly with gardening leave wages or the threat of legal action! A good staff member will be valuable and profitable to your business. A bad one can do a lot of harm to your business.
The option to go with a freelancer.
There is a risk with going with a freelancer. However, the financial risk tends to be a lot lower than employing someone in-house. Generally, they are cheaper as they will charge lower rates. The good thing is that if the freelancer isn’t performing, all you need to do is stop your working arrangement with them. Furthermore, the freelancers tend to have higher skillsets from working hands on across projects in their careers. These skills can be leveraged at a fraction of the cost, compared to hiring someone in-house. Since they work for themselves, they set their own wages or fees, so you aren’t subject to meeting minimum award wages for labour in that particular industry. That responsibility is passed onto the freelancer. Another additional benefit is they do the invoicing, bookkeeping and accounting. This saves you managing this process with your own internal accountant.
The option to go with an agency.
Going with an agency can be beneficial, but it all comes down to the account managers and the execution team. Should the account manager do a great job, then you will essentially be gaining access to a productive workforce at the price of hiring and managing one person internally. Typically, the agency will have their own tools, software and hardware to manage and deliver the operations for their clients. If the agency isn’t performing well, you will have the option to dismiss the agency. However, the termination clauses will need to be agreed upon between both parties, prior to the commencement of the working engagement.
The option to go with a licensor or franchisee.
Do you need a working arrangement where another company can manufacture and deliver goods or services under a licensing or franchisee arrangement? This is a good way to expand your businesses services quickly. Furthermore, you can manage the amount of control that you will have with these types of arrangements, without being subject to hiring costs.
While hiring someone can be the optimal option if done well, there are plenty of other solutions that you can take advantage of. You can invest into a process that is already working with an outsourced solution.
