20 Sep In-House Hiring or Outsourcing? Which is better?
Companies, startups, and enterprises always need in-house employees or outsource hiring to run their business operations successfully. Both options have their own pros and cons. The hiring decision depends upon the nature of the project. There are many things to keep in mind while hiring the talent such as whether the project is short term or long term? How many employees need to be hired to accomplish the particular business process and many more questions like this.
Here are some of the pros and cons of in-house hiring and outsourcing that help you take a better decision that fits your business needs:
The Pros of In-House Hiring
There are so many good things to train and work with a local contractor. Hiring or training someone in-house can strengthen the framework of a company and lead to having a long-term advantage.
- One-to-one Conversation
Face-to-face or in-person communication between employees and the owner of the company could be really beneficial, it breaks language barriers and you can easily convey your message to your employees that what you really want. It also helps fix some critical issues which lead towards progress. These face-to-face engagements give a boost of energy to employees, which sometimes leads to bigger ideas and expansion of the company.
- Intellectual property remains confidential
One of the best advantages of hiring in-house employees is intellectual property, resources, records and sensitive data of the company remain confidential and hidden. Sometimes the employees are also asked to sign the non-compete contract which bounds them to stay with the company for a certain time period. Even if they leave the company, the contract prevents them to take the ideas of the company along with them. To simply put, the employees cannot transfer the ideas or work from previous company to the next company.
- Negotiable salary and easier schedule availability
You have a say in their salary rate and manage their schedule availability easily. You can easily agree on their pay rate keeping in view the budget of the company. Additionally, their availability helps execute business process easily and timely.
- Skills are Transferable
In-house employees are trained on a specific project which they later train their junior employees or apply their skills on other projects as well. In-house employees use their all resources to fix the problem quickly. In short, in-house talent is a good asset to your company.
The Cons of In-House Hiring
- Professionalism and Talent is missing
Among one of the pros of in-house hiring is lack of desired skills and professionalism in attitude. It is sometimes difficult to find quality talent particularly in the third world or developing countries. In most of the cases, skilled employees are already hired by multinational or reputable companies. Finding professional and skilled employees require a huge spending of money on recruiting agencies or probing through social media etc.
- Ability to make changes in Team is Limited
If your in-house team is dealing with the marketing department and there occurs any issue, you cannot make changes easily and your options are limited. If you are facing problems in getting the desired output, or your team members are not doing well, it takes a lot more time, effort and resources to address the problem. You cannot simply replace the staff and hire the new talent. You have to follow the complete HR procedure to appoint the new talent. This process may affect the reputation of your company and bring a negative connotation to the productivity.
- It is time-consuming and requires a lot of effort
In-house hiring requires a lot of effort, time and resources. You have to go through all the HR steps to bring new talent to the company. It could take several wrong hires before you find the right person for the desired project. It might be costly and full of trial and error.
The Pros of Outsourcing
- Outsourcing is Cost Optimizing and requires less time
Hiring remote employees (offshore or onshore) requires a minimum operational cost. Moreover, there are no extra expenses like office rent, utilities, infrastructure, and maintenance. Similarly, It can take much less time, effort and energy to find skilled and talented workers, due to agencies like Upwork, Fiverr and Freelancer. This means projects may get completed quicker in the hands of professional employees, and the product can possibly reach the market faster.
- Availability of more resources
Outsourced marketing agencies are equipped with the latest tools to help execute business operations. They have access to advanced software, Cloud, Adobe Creative Cloud, and customer relations management (CRM) software that performs the functions efficiently and without human error.
- High level of Expertise
Remote or in-house hirings are only specialized in one particular field. If you outsource a software engineer, you would want to hire someone who has had significant experience in that field. In such a case, he would easily understand what you want to get them done. Consequently, he would be able to complete quality work much faster than an entry-level engineer that the human resources department would hire in-house.
- Focus on Core Business activities
One of the advantages of Outsourcing is that it focuses on the core and important activities of the company. It requires a business owner to identify which functions are critical and more important to his company. These are the tasks that need skilled workers and immediate attention which in most of the cases are fulfilled by an outsourced agency.
The Cons of Outsourcing
- Time Zone affects service delivery
Remote staff may have a different time zone which ultimately affects the scheduled delivery time of the work. These are the factors which are not under your control and may affect the performance of the work. However, this issue can be fixed by setting deadlines and managing expectations through open communication.
- Communication Gap
Hiring someone from the outsourcing agency may expose certain cultural differences that may affect communication among members of the team. There also exist some language barriers which you cannot overcome easily. Sometimes, you cannot help them understand what you really want and what could be the deadline.
- Slow Response
Outsourced marketing agencies are sometimes slower to respond. This is because they work on multiple tasks at a single time which affects the performance of the task and get failed to meet the deadlines.
- Hourly Rates are higher
There is still a debate between flat rate vs. hourly rate among the freelancers and contractors. You have to deal with this situation carefully while hiring the outsource employees.