Business: Outsourcing Of Freelancers Vs Permanent Employees.

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Businesses are constantly trying to get specialists for different requirements in their organizations. Departments such as human resources, information communication and technology and auditing among others can either be incorporated into the organisation as permanent departments or instead, can be outsourced from freelancers or other organisations dealing exclusively on such services.

In the case of startups, when you have just begun your business, it could be difficult to determine whether or not you would need human labour in terms of full time or outsourcing. It, therefore, becomes important to find and maintain a balance between hiring permanent employees and contracting freelancers and all at the right time.

Outsourcing Freelancers

The amount of workforce outsourced from freelancers keeps growing bigger and bigger and is estimated to even get bigger.

Advantages:-

  1. Flexibility – Businesses, particularly, small businesses have both productive and less productive spells during the course of a year. This can make the accrual of human labour difficult to determine therefore by opting to hire freelancers, a small business can benefit from having extra members during a busy period as well as cut the ties during the less busy periods.
  2. Cheaper – Compared with the expense of finding, hiring, and then providing a full-time employee with a salary, working with a freelancer or contractor can be a less expensive option.
  3. Temporary filling a skills gap – Some projects require extremely specialized skills and the already present manpower could fall short and that is where outsourcing comes in.

Disadvantages:-

  1. Unavailability – Sometimes, freelancers are just unavailable and there is no one else to perform the duties intended for them which means you may not be able to fulfil contracts.
  2. Complex communication systems – Compared to employees, communication with contractors is never easy. Freelancers also work on their own schedules and systems to deliver a finished product and you may not have a chance to offer any input in the development process in comparison to employees.
  3. Disruptive – The idea behind freelancers is that they come and go, which could be disruptive for the way things work in your business if you are working on long-term projects or you need quick input.

It would also be important to consider a few other things before you settle on hiring freelancers. For example:-

  • Does your team possess the skill you are looking for?
  • What is your budget?
  • What are the risks?
  • Will you ever have to change?

Permanent Employees

Permanent employees are always preferred when:-

  • There is an overwhelming need for personnel for a given function. This need has to be consistent and recurring. For instance, if you are always looking for a web designer, you would rather have a permanent employee rather than outsourcing that many numbers of times.
  • There is a large budget and you can afford to hire full-time employees.
  • Building a strong internal culture is important to you as the business owner. Permanent employees are the foundation of strong working relationships.
  • You are ready to hire on a permanent basis meaning that you do not want to chase after freelancers every time you have a singular task.

Advantages

  • Loyalty – Permanent employees develop some kind of loyalty with each other and the business making them more emotionally attached.
  • Orderly – The fact that permanent employees do not keep coming and going ensures that the day to day running activities of the company is not disrupted.
  • Always available – Since permanent employees do not leave during the low production season, they will not be absent when needed.

Disadvantages

  • Expensive – Monthly wages on employees could be a huge cost on the business.
  • Not Flexible – Employees cannot take breaks from work during a low season.

You may also want to find out Is Buying Into A Franchise Better Than Starting A Business From Scratch?

Keywords: Small businesses, Outsourcing Freelancers, Permanent Employees.

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