Should you hire or outsource?

When or who to hire is one of the million dollar questions for any small to medium organisation. The truth is, we can’t do everything ourselves, no matter how hard we try.
The only way to grow is to leverage someone else’s time and skills and harness them for your cause.

When expanding your one-man band for the first time, there are a lot of new problems that arise:

  • Your new recruits might see things differently or do things differently.
  • They are probably not as committed as you.
  • They want to make their mark by changing things.
  • Or not really interesting in increasing your impact at all, they just want to do their work and go back to their families.

Most, if not all, of these issues, can boil down to one problem – Lack of structure and proper training of the structure.

Whenever I made the mistake of hiring an in-house person due to his extensive experience in a field I knew nothing about, frustration soon followed. Both for me as the boss and the employee. On the other hand, whenever I outsourced an aspect of my business, results (usually) soon followed and at a fraction of the cost compared to hiring a full-time staff member.

And the reason for this is the same – a specialising consultant or 3rd party provider did have a proper structure and training.

I’ve been working with businesses and non-profit for a little more than 10 years and this question keeps coming up: “Should I hire or outsource?”
I wanted to give my point of view on this, what I do within my agency and what I recommend you do too. Since my agency offer services to non-profits like yours, I’ll do my very best to remove all bias and give you both sides of the story as I see them – As a service provider and as a business owner myself.

Being a small organisation is hard! There’s always something to do and not enough time to do it. Every day there’s something new we discover that can potentially shift our focus and I’m sure you can agree that any help, what so ever, will be beneficial to increasing the activity and achieving more goals.

The 4 questions

I have found that by considering 4 questions when deciding if to hire or outsource, I have managed to systemise this decision-making process to a point where anyone can apply it to their own organisation.

Do I already have the skills needed for this position?

This is the first thing I think of. I try to be completely honest with myself, imagining the first week of the new employee and 6 months after he started, thinking “What will he do exactly?”.

If I have a clear vision of what needs to be done, if I can a clear action plan that I can pass on to the employee or if I am confident that I can create this action plan for him before he starts. This means that I can both create a structure and train the new employee – Then I “tick the box” of the employee over the 3rd party.

This will usually involve key parts of the service I’m providing which I want to make sure is done a certain way after researching and engaging with this activity for more than 6 months myself. If I don’t have any experience with the skill, I will probably outsource the activity.

How long will the new team member need to get things moving?

The saying ‘Time is money’ couldn’t be truer in this case. As a small organisation, you should constantly be aware of your cash-flow and the bottom line. 3 months, or sometimes even less, without the right income level can completely break the organisation. I try to look at the cash-flow as water to a person. My business can’t survive for long without access and the ability to consume money.

Therefore, this question is key to understanding my ability to create the structure and train the employee in time to start producing for the business before resources dry out.

How much will it cost to hire a senior staff member compared to hiring a 3rd party expert?

From my personal experience helping organisations with their online activity, I know that because we are working on multiple projects at the same time, my pricing is considering the maximum number of projects we can do simultaneously and dividing the costs between the different clients. But when I hire in-house I have a responsibility for 100% of this person’s income and wellbeing.

I usually do a quick search on REED, or something similar, to learn what full-time senior employees expect to be paid and check that against the offers I received from 3rd party providers.

What is the expected ROI (Return on Investment) on making this decision?

This depends on the relevant activity expected. If the position is about providing the actual service of your organisation, you can check how many cases/clients/products/sessions or any other, will the employee is projected to generate. One thing to remember is that without actually doing the work, you will probably not hit the right figure here, so try to be a bit cynical on what can happen – considering the worst case (other than ‘nothing’).

A 3rd party provider should usually tell you this. Not as a fact or guarantee, because no one really knows the future, but from similar cases and clients they have delt with. Knowing the ROI even before you start an activity could make things A LOT easier for your decision making since you’re simply considering ratio on how you invest your funds to generate more funds.

Bonus question: Why not just find volunteers or pro bono providers?

When it comes to non-profits, I see this mistake happening over and over. Volunteers are only great for performing repetitive tasks within the organisation. You should restrict their decision making and strategic thinking to the bare minimum as they have no real obligation to keep helping you. I’m sure you have found one or two very loyal volunteers over the years, but this is rare. The fact is, people need to support themselves and there should be some kind of a fair trade to keep people motivated over time.

I’m being asked to take on pro bono projects all the time and I wish I could do that! But in order for an expert to keep evolving in his field, he needs to feel rewarded and make sure his own business is sustainable so that he can keep helping you with your goal over time.

For example, would you bring in a volunteer or a local digital agency to do your social media campaigns pro bono? You’d probably say “Sure why not, it would save me a lot of time”. But what if an expert can get you a result that is 10 times better than someone doing the work in their spare time on the side?

Imagine that with a volenteer you can raise £2,000 per month but bringing in an expert or hiring a senior in-house marketer can help you raise £20,000 per month.
Which would you choose then?

When considering volunteers or pro bono providers, ask the top 4 questions once again and you will find that when it comes to strategies and creative thinking, in the vast majority of cases, this choice is the wrong choice.

People are the greatest resource in the world and it’s time that our sector with really let this sink in, invest in good reliable people that can get good reliable results.

As my grandma used to say “Buy for cheap now and you will pay for it later” 🙂