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Article from a Guest Expert

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To Outsource or Not To Outsource?

Outsourcing certain tasks can be a huge benefit to your company by saving you time and even money. There are many third party organizations out there to fit all of your business needs. Also, in today's job market, there are more and more young, highly-skilled workers who are not able to find full-time placement with a company. The result has been a huge increase in the availability of skilled contract-based workers. For business owners, this represents a huge source of untapped potential. Before you might have been forced to hire full- or part-time for a position you wanted to fill, but you now have the choice to contract virtually any skill set. Outsourcing can be the right option for many different scenarios, especially if you are overwhelmed. But of course, you don't want to outsource your whole business. So, how do you know when it's the right time to outsource?

1)     What Are the Benefits?

When considering outsourcing, you should make a careful evaluation of how the job you are specifically considering could be improved by using a contractor. A few reasons why outsourcing is generally a popular option include:

  • It's cheaper for short-term projects. That is, if you are trying to design a company logo, a job that will probably only need to be done once or at least infrequently, you would certainly save money by hiring a contractor for this single project, rather than bringing on a full-time employee, unless you anticipate needing further graphic design work as a regular part of your business. Other popular outsourcing options might include handling payroll tax problems, website development, HR issues, and content development.
  • It can save you time and resources. Once you've brought on an employee to handle a certain job set, you will need to provide them with training and support as needed. For jobs that are not central to your functionality, it doesn't make sense to invest lots of time and resources in these kinds of positions. A third party company or contractor, by contrast, would be expected to handle such needs on their own.
  • It can be easier to accommodate. If, for the time being, you just need a quick fix for a business problem and you aren't ready to commit to a long-term solution, it can be easier to accommodate a third party in the short-term to help you find a temporary solution.

2)     Knowing When to Outsource

When considering outsourcing a job position, there are a few basic questions you should ask yourself when debating hiring a contractor vs. an employee:

  • Does this position relate in any way to your core operations or is it a tangential support position? In general, you probably do not want to outsource a position that relates to the core functionality of your business. For example, if your business specializes in web design, you probably don't want to hire lots of design contractors to work for you. You need to focus your time and resources on producing a high-quality product, which means investing in your employees.
  • Will you save more money than you'd lose? Contractors are cheaper than full-time employees in that you do not have to pay for their benefits and you can pay them an hourly wage (though depending on the nature of the position, this may end up being more expensive than a salaried position). However, contractors are usually brought on as short-term employees, so you cannot rely on them as a long-term fix for your business. If, in the future, you decide to bring someone on in a full-time capacity, will you lose a lot of time having to explain to them the work the contractor did?
  • How does communication factor into this position? If your contractor is going to work remotely, an option that is becoming increasingly popular for young people who are choosing not to get cars, how will your communication for this position be impacted? Does this position require lots of conversation and explanation that would be better done in person? Would it be preferable to have the employee in the office full-time so that you could easily go talk to them as you needed to? If so, you may want to consider adding a contract listing to a career site and specify that you prefer someone local with transportation.

3)     Options in Outsourcing

Because there are now so many American workers that are working as contractors, you have multiple options available to you in finding contract workers. Popular resources include Guru for remote contractors and Craigslist for local contractors. You can also check out websites specific to the job you are trying to fill. For example, there are companies that specialize in web design or copywriting. Once you've figured out that outsourcing is a good option for you, check out your options in pricing on local and remote contractors and go from there.

 

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About the Expert

Peter Hupalo
Owner of HCM Publishing, Inc.
Peter investigates the latest computer-programming technologies and researches companies for investment. He also writes a column about entrepreneurship and small business for iSyndicate.com and reviews biz books. Peter wrote Thinking Like An Entrepreneur, about how to make savvy business decisions and take real control of your financial destiny. more