An entrepreneur’s biggest challenge is finding and retaining talented staff. Finding talent can be a real headache running multiple projects or operating in niche markets. The recruitment process isn’t cheap, and the administrative processes associated with hiring and embedding new staff can absorb many working hours across different departments.
If your company is driven by entrepreneurial energy, you need flexibility and the ability to recruit people with key skills quickly. You also need to be able to dispense with peoples’ services quickly and decisively, with the minimal administrative hassle. The new work-from-home culture is potentially a major advantage to ambitious employers who work on projects or with multiple clients.
Over the last 10 years, employers have gained access to a new demographic of remote workers who reject conventional office culture and are happy to take on short-term commitments. The key is to know how to scale your business. CEOs and VPs need to understand when to opt for outsourcing and how to engage with freelancers and sub-contractors when to promote and re-train their staff into new roles, and when to recruit new hires.
In-House Hiring vs. Outsourcing
The traditional employment model for most businesses is to recruit full-time and occasionally part-time staff. Companies provide employees with a workstation in a company building and pay them a monthly salary. This hiring approach certainly made sense if you have a stable business model that requires people to work long-term in fixed roles. It also matched the needs of a generation of workers who expected to spend years, or even a lifetime, in the same job.
The advantages of this employment model are that it can bring stability to a company while preserving knowledge and skill sets for transmission to junior employees. The disadvantages of the traditional model are becoming increasingly apparent, especially as workplace technology evolves.
The Disadvantages of the Traditional Employment Model
1. Office space is expensive to acquire and maintain. The cost of utilities and local taxes eats into budgets. When administrative costs and additional financial obligations like pension fund contributions and compulsory benefits are considered, hiring full-time employees can be far more expensive than outsourcing.
2. A stable in-house workforce can experience stagnation, low morale, and even burnout. When employers insist on a 9-hour day, they simply pay workers for their in-house availability rather than for quantifiable productivity. When employees are obliged to work in open-space offices, their morale, mutual collaboration, and productivity all slump, sick days increase, and employee retention is reduced. Companies now face the ‘quiet quitting’ phenomenon, where employees do just the bare minimum to avoid being fired.
3. There is a growing realization that many corporations have outsized HR departments and that HR has undue influence in the daily running of companies.
Reduce Inhouse Hiring; Scale Better by Outsourcing
If you’re running a dynamic, growth-focused business, scalability is essential. You need to expand and contract seamlessly on a project and contract-based level. Smart outsourcing can bring on goal-oriented individuals and teams focused on meeting deadlines. They also have wider networks of professional contacts, diverse experience, and access to expensive technologies and software. There’s a potential to tap into a pool of expertise you’re unlikely to find in-house.
It often makes great sense to connect directly to experts with specialist knowledge and niche skills rather than to recruit and train your staff. This logic applies across the corporate spectrum and can include every aspect of IT, marketing, customer service, product, business development, and administrative roles like accounting and bookkeeping. You can even outsource your recruiting. The challenge is to find the right people when you outsource and to ensure that they deliver optimal service.
How to Hire the Right People to Scale Your Business
You need to understand your exact requirements when you’re planning to outsource (whether for a specific project or an ongoing administrative or logistical requirement). If you’re unsure of your exact requirements, either retain the services of a consultant to determine them or invite bidders to make a broad pitch that shows exactly what they can do for you. Getting as many proposals as possible is important if you take this approach.
A simple word of mouth is still one of the best ways to find the right people regarding outsourcing and hiring. Personal recommendations and introductions from someone you already know and trust can be invaluable. Whoever you’re dealing with, you need to invest in creating a strong and positive working relationship. Personal recommendations and introductions work both ways. Satisfied freelancers and contractors can bring you many future businesses – and other service providers – via their professional networks.
1. Don’t automatically choose the cheapest option. It’s always better to pay more for a genuinely professional service.
2. When outsourcing, think carefully before hiring people from different countries or states. Working across different time zones can limit the availability and restrict workflows. Cultural differences and geographical separation can create problems when communicating expectations or enforcing contractual obligations.
3. Be clear with remote hires about expectations, goals, and how to quantify results. It’s important to define availability and agree on workflows, schedules, and procedures. Genuine professionals will have no objection to trial periods and phased (results-based) payments and will be open to the concept of retainers. It’s usually a wise move to make the final payment conditional on the contract’s timely completion and offer bonuses.
4. Always protect yourself with professionally written contracts and nondisclosure agreements. Ensure that your IT system adequately protects sensitive data before sharing files and allows third parties to access your IT ecosystem.
The ability to scale your business, and create a flow of hiring and outsourcing that allows for agility and adaptability, can set you apart from your competitors. Effective outsourcing is cost-effective daily and allows for rapid growth when you launch a viable product or break into a profitable market.
Subscribe to Our Newsletter