Growing businesses have a number of options when it comes to obtaining the manpower they need. They can choose to hire full- or part-time workers, find temporary help, bring in contractors or outsource tasks to other businesses. There are appropriate circumstances for each of those choices, but outsourcing for small businesses is a pivotal decision.

When is hiring a permanent employee a better choice for your business than outsourcing, and vice versa? Here are some questions to consider:

  • How much revenue will you lose if you do not add manpower?
  • What impact could not adding help have on customer satisfaction?
  • Is additional bandwidth a short- or long-term need? This may influence the type of relationship you want to establish with new help.
  • What kinds of skills are required to do the necessary work?

When to Outsource

Outsourcing for small businesses often makes sense when you need to ramp up production quickly, such as during a busy season, but you don't want to make a year-round hiring commitment. It allows you to bring workers in only when needed, and you can also more clearly tie the cost of those workers to the income potential to better control your labor costs. Plus, outsourced workers are only paid when they are on the clock, unlike employees who are given paid holidays and benefits.

Outsourcing is also a smart move when you need expertise that no one on your team has, such as turnaround experience or crisis communications skills. You can bring in an expert to address your immediate challenge without having to put them on the payroll.

The main downsides of outsourcing for small businesses is that independent contractors, such as freelance writers or website designers, often work with other clients simultaneously. That can limit their availability.

When to Hire

There are also scenarios when outsourcing for small businesses is not the best solution, and hiring would be preferable.

If you discover your company has been paying large sums for contract workers and you don't expect the workload to decline, it may be time to start making those contractors permanent. That way, you can begin to reallocate the internal workload more effectively. You can also add talent that may grow your business in new, positive directions.

In fact, once you identify a particular skill set that is critical to your operations — a core competency — hiring employees with those skills can provide a competitive advantage. Bringing those talents in-house gives you more control of, and access to, the brainpower.

Hiring is a big commitment, but when you see that your company will continue to require certain skills and abilities, making talented workers part of the team permanently is the right choice. That way, you're adding an asset rather than simply managing an expense line item in your budget.

Tags: freelance writers Hiring independent contractors Outsourcing