To hire or to outsource – that is the question
Imagine you have just set up your own start-up. It means you will need to build a great team so that you could achieve company’s goals. You will have to hire professionals. But wait. Professionals are expensive. And you, as an early tech start-up don’t have a big budget initially..
Don’t panic! There’s always a solution. Have you ever heard about outsourcing? It’s a great opportunity both for beginning start-ups and more experienced companies. However, everything has some advantages and disadvantages. This article will help you make a key decision. First let us bring the outsourcing definition closer.
What outsourcing means?
It’s the situation when you decide to delegate some of your services to outside companies or individuals. Why? Usually the main reasons to choose that strategy are focusing on reducing costs and saving your company’s precious time. This cost-saving measure is very popular among Western manufacturers who produce in China or Bangladesh in order to make the process cheaper by using much more profitable Eastern labour. It’s also called offshoring.
If you are undecided if the outsourcing could be something that your company needs there is one easy rule:
“The other part of outsourcing is this: it simply says where the work can be done outside better than it can be done inside, we should do it.”
Perhaps you haven’t heard that even Google, who is well-known for their employees care and in-house corporate culture, used this method to have a bigger return on investment.
Weigh the pros and cons
Let’s find the answer to the question posed at the beginning. What would a reputable economist respond? Probably “It depends”.. And it is the right response.
First of all – if you’ve just started your own company probably you need to save money. This is when in your situation outsourcing is better – usually it’s cheaper to find a company from a country with lower average salaries and pay them for the service than to hire your own team of developers.
Not only you save money – you save a lot of time too. You don’t need to spend time on the recruitment process – the company did it instead of you.
Remember that saving money is not always the most important issue (in some cases outsourcing won’t be cheaper). Except for the satisfying ROI, take under consideration some far more significant non-price advantages.
Outsourcing companies have a lot of experience – they’re responsible for many projects a year. It’s a chance to learn a lot – they can teach you things you would never discover by yourself. By cooperating with them, there’s more brain capital floating around your start-up.:) Furthermore, outsourcing companies feel more responsible for the project they’re working on than your employee – they take care of their good reputation.
On the other hand, consider the fact that when you outsource the project you have less control on it. Moreover, you need to be more careful about safety of your data, especially if you decide to cooperate with companies from India or China, where the data protection law is not so strict as in Europe.
Another concern could be lack of good communication (not every firm uses a brilliant communication system as we do in Dotinum). Sometimes it’s very difficult to find a common ground with people who are located 10000 miles away, where there’s a different time zone, working hours and.. a culture. It could be another obstacle to conquer. Before cooperating with foreign people, you should read more about their cultural habits in order to avoid blunders.
Build your own team
When is it better to hire web developers? If your company wasn’t just started and you have enough budget to hire, do it. First of all, you will have a lot of control on every aspect of the project. What’s more, you will benefit by face-to-face conversations – it’s easier to find common solutions together. It also means that you will keep a constant high quality level of communication. Of course it’s possible to meet people from the outsourcing company, yet it’s much more difficult to organise.
Moreover, you risk less – you can lead a long recruitment process in order to find the best professionals on the market. Then their brain capital will be your company’s priceless asset. Employees are a part of your team – they understand your firm’s values and priorities – so it’s easier to achieve corporate goals.
What is the biggest downside of hiring? The right answer is one – costs. You have to spend much more money to hire professionals. Consider health insurance, which is very expensive and other additional expenses like office space, management costs or problems with replacing people. When it comes to outsourcing, you pay for the finished project and that’s enough.
Furthermore, you will need to spend a lot of time on the recruitment process and it’s not so easy to convince some web developers to work with you permanently.
And what do you think – to hire or to outsource? Let us know in comments below!