Outsource Consultants vs. Hire Employees - the Pros and Cons
While I was away on parental leave, I received a couple of inquiries about the differences between hiring employees vs. outsourcing, and what would work better for their team. As in the words of every wise HR Professional, the answer goes something like this "well, it depends."
The answer for which is best, remains the same "it depends". Ultimately there is a thin line between what makes someone an independent consultant or an employee. It really can be confusing when you are determining between the two. So how do you decide how you want to add or supplements your team? Do you hire an employee? Do you hire an independent consultant? Either route you decide to take, there are pros and cons. Here are a couple of key differences to note when considering hiring or outsourcing work.
Schedules and Working Availability
Independent consultants like myself who have their own business, schedules remain flexible and their own. This means you aren’t able to have the same control with them in the way that you could an employee. We get to set own schedule which means we determine when and where they are working. Most of the time, this is a non-issue but it can be challenging if you have time specific tasks that don’t fit their schedule in the same way you’d prefer or if you’d like them to be available when you plan to work.
Employees on the other hand have set office hours. This makes for a predictable schedule that is easy to reach them at. Some employees may even report to work in person or work in a hybrid format whereas many independent consultants can and do work remotely.
Personal note: As a new mama, this is incredibly helpful for me to remain flexible to optimize my output for my clients.
Outsourcing vs. Insourcing
Independent consultants are able to hire or outsource their own support/subcontractors for work at their own discretion. In many cases this can work quite well as independent consultants can outsource individuals with an expertise in a specific area but you are not always aware of who may be completing the tasks you have assigned.
Personal note: I recently outsourced a piece of work with a former colleague of mine - it was no only incredibly helpful for me as the consultant hired, but I got to leverage the expertise of another professional. I would say we knocked this out of the park and left the client overwhelmed with gratitude on a job well done.
Employees are responsible solely for the work that you assign. This makes it easy to provide feedback and allows for smooth communication when completing that particular task. However, if the task is not in their wheelhouse, it may not be completed to the caliber as someone whose specialty is in a specific area.
Contractual Obligations vs. At Will
We hate to think about letting someone go but we know it happens for a variety of reasons. Employees can be hired and fired at will. With consultants, there are likely contractual obligations that must be upheld. These terms are agreed upon up front by both parties in advance of kicking off the working relationship. This is typically a non-issue but something to consider when you are considering between the two.
Personal note: With each new working relationship, it is key to go over the contractual terms, scope of work and timelines. This not only helps me stay on course to meet your business objectives, but for you to have a clear picture of deliverables.
Costs and Materials
When it comes to employees, you’re providing the equipment, software, or materials needed to complete the necessary work. This will cost you money at the start and potentially additional training. Independent consultants will have their own equipment and own all of the necessary tools/software to begin working right away. Independent consultants have completed their own education and growth saving an organization both time and money as they are able to dive into the work right away.
Personal note: It is great getting to work with teams and learn new tools. I work with a variety of clients, some prefer Asana, Slack, Teams, Skype - being flexible is key when working with an independent consultant.
What is the best fit for you and your business?
Every organization is different and what works well for one may not work as well for another. You have to make a decision based upon your needs and goals. It isn’t required to go all one way either! You are in charge of your business which means you could have some employees AND some independent contractors. The choice is truly yours so go with what works best for you as you build your team!
Personal note: At TMC we know there are a lot of questions that may be still unanswered about hiring or outsourcing, and as always we are happy to help.
Send us an email at firstname.lastname@example.org for more information.