A Startup Dilemma: Choosing Between In-House or Outsourcing

Now that you’ve got a fresh, brilliant idea for your startup – do you have the right people to execute it?

In this article, we try to answer one of the questions you might be asking: Should you outsource or build your own in-house team?

For those who have already decided on outsourcing, then our previous article might interest you more: The Best Outsourcing Company for You. And for those who haven’t decided yet, read on.

The answer varies from industry to industry, from company to company, and from person to person. There may be situations where outsourcing isn’t the best step forward, but there are also countless stories of business owners realising that they should have outsourced sooner and taken advantage of savings on time, money and energy.

Comparison of In-House and Outsourcing

Let’s break down the pros and cons of building an in-house team vs. outsourcing.

Pros of In-House:

Cultural Fit. Hiring locally has more chances of you finding someone who fits perfectly in your company culture. They probably live in the same area or close by, talk the same way you do, and so on. You’ll have more similarities than if you were to hire offshore.
Clear, quick, and easy communication. Having everyone in the same room at the same time reduces the chances of misunderstanding and miscommunication. When you need to make changes to a project, you can easily walk up to the team members, call for a meeting and discuss or brainstorm. It’s easy to clarify any ambiguous tasks too, or explain processes by demonstration.

Cons of In-House:

High Cost to the Company. The whole hiring process can be costly, and that’s a huge deal especially if you’re a startup. In addition, hiring a full-time employee locally requires a huge cash outlay. Aside from salaries, super, and other benefits, you’ll need to get a bigger office space with higher monthly bills, and you’ll need to stock up on office supplies.
Limited Skill Set. When you limit your openings to local applicants, then you’re missing out on a larger talent pool. Outsourcing lets you tap into more people, who might have the skills that you need and suit the job better.
High Turnover Rates. High turnover rates can be costly to a company. You’ll have to go through the hiring process again, look through resumes, conduct interviews, and provide training. Those tasks take up your time, which is better spent on sales calls and other core business activities.

Pros of Outsourcing

Cost-effective. Outsourcing tasks or projects can be a lot more affordable than handing them in-house. When you hire offshore staff with Outsourced HR Solution, you enjoy lower average salaries and lower overhead expenses.
Focus on your expertise. Peter Drucker, the father of management, once said, “Do what you do best and outsource the rest.” Once you start outsourcing, you can focus more on your expertise and deliver better output – in quality and quantity. It will also lessen the burden on you and your in-house team, increasing everyone’s productivity.
Access to skilled employees. With Outsourced HR Solution, you get access to many qualified, skill professionals. Some specialise while others can do all sorts of tasks. Whatever you need, there’s someone we can find for you.

Cons of Outsourcing

Less Control. This depends on whom you’re outsourcing the tasks to. If you’re working with a marketing agency for example, then some marketing decisions are theirs to make. You’ll have less control on the work processes and output. However, if you are outsourcing to a BPO company, it’s a different setup. Your offshore staff is working directly for you, and you have more control on their work.
Communication Gap. In this highly digital world, there are so many apps out there that we can use for communication – Zoom, Skype, Viber, WhatsApp, Facebook. There are also project management tools like Asana, Trello, Slack, and others. All these apps make outsourcing easier but, of course, some tasks may require face-to-face interactions. If you prefer working with your team in the same room, with quick feedback and constant adjustments, then outsourcing may not be the most efficient solution for you.

Conclusion

Not all businesses require outsourcing, and not all businesses require full-time, in-house staff as well. It all depends on what you and your company have and need at the moment. You can have an offshore team working on graphic design or bookkeeping, and an in-house team working on sales and printing.

If you think you can outsource some tasks, then go ahead and try it. Take advantage of the huge cost benefits. Lower overhead costs mean higher profit margins – and that’s important in any business. Who knows, you might end up finding a long-term employee who can be instrumental in the growth of your startup business.