One of the most appealing factors of outsourcing is that you only have to hire staff when needed. Additionally, you can find top-quality workers usually at a lower rate than traditional workers require.
Before you take the plunge into the outsourcing realm, however, you need to take the time to determine whether it’s the right option for your business. The following list of pros and cons will help you determine if outsourcing is right for your startup.
Pros of Outsourcing
Lower Cost
This is the most appealing benefit that outsourcing has to offer. Many outsourcing sites have potential workers bid for jobs, which can drive the price lower than your would normally pay. You may also want to considering checking locally for businesses and individuals to meet a temporary need, such as creating your website.
Access to Specific Skills
When you outsource your work, you have access to an unlimited variety of skills. Whatever you need to have done, simply post the job, make a hire from those who apply, and pay when the job is completed. Since you can terminate the contract after the project is complete, there is no ongoing expense.
Progress While You Sleep
Since many providers of outsourcing services live in a different time zone, you can see progress on your specific project twenty-four hours a day, seven days a week. You can assign a business project before you go to bed and have it ready when you wake up.
Superior Flexibility
Are you unsure of the future of your business? If so, freelancing is ideal. You have access to talented and skilled workers when you need them – without having to commit to a long-term contract. This is extremely beneficial for start-up businesses that are not sure of their company’s future.
Cons of Outsourcing
Less Control
Since you will be hiring workers in another location – often in another country – you lose control in some areas. There is no way to determine if the worker you have hired is actually working or billing for time not spent completing assigned work. In addition, you are relying on two-way communication and if there are problems communicating, you waste time and projects may be not completed to your individual specifications (or on time).
Lack of Protection/Guarantee
You have to consider the possibility of a worker you hire stealing your idea or copying the code used for your work. This is even more of a concern when you realize taking an issue to court for satisfaction is virtually impossible, especially if the person lives in another country. Some on-line work-for-hire sites do offer limited guarantees for payment of hours worked, however, enforcement for breaches typically only involves the worker being removed from the site.
Trouble Finding Proper Provider
When you outsource the work that you need done, there is a chance that the provider you hire will not able to complete the job to your satisfaction. To avoid problems, take time to interview each candidate, check their record of prior work, and verify comments from previous clients.
Miscommunication Risks
Unfortunately, this is a most common issue with outsourcing. Misunderstood or misread emails, different cultural backgrounds, and lack of basic written communication skills all can contribute to big problems for your outsourced work.
The 9-Step Process to Successful Outsourcing
If you have decided that outsourcing is the best option for your business, it’s important that you fully understand the process so that you set yourself – and your outsourced candidate – up for success.
1. Come up with the official job title, as well as a detailed list of what that job will entail. If it is something you are incapable of doing or just don’t have time to, be sure to include this type of information. This will help you figure out what you need, as well as what you are relying on someone else to complete.
2. Make a list of both required AND desirable skills you are seeking. It’s okay to be clear and specific about what you want. If you post ads online, you’ll need to be prepared to sort through a lot of applications to find a handful of good ones since there’s a strong likelihood that you’ll be inundated with responses. If you end up on an online job board that has a database full of millions of potential candidates, you’ll want to have this type of list readily available so you can weed out candidates who lack your desired skillset and more easily identify those who do. This process may result in you feeling like you’re looking for a “needle in a haystack.” Having a list of “must have” and “nice to have” skills will help you identify potential candidates much quicker.
3. Properly plan where you’ll source your candidates. Will you use an outsourcing website, like eLance or Freelancer? Will you use a classified site like Craigslist? Will you post your job ad on billboards in your community? Or will be it be some sort of combination of a few different sources? Take time to properly plan out your strategy.
4. Know what you can afford. While this one seems like common sense, often times, startup founders go into “sticker shock” when they initially start the outsourcing process. It’s always a good idea to spend some time familiarizing yourself with the range of rates you can expect to pay for the type of position you are seeking to fill, as well as the required skillset necessary to complete the job successfully.
5. Know what you want (this directly ties into item 2 listed above). The candidate evaluation process can be a daunting task. Many candidates will share their resumes, links to previous projects and anything else they find relevant to your job posting. While you are evaluating each candidate individually, match up their skillset and experience with what you are seeking. Go through each application carefully so you can get a better feel for each applicants work, how serious they are and if they possess the qualities you actually need.
6. Schedule interviews. Identify your top 5 candidates, set up interviews and decide who will be the best fit for your business. Get specific during the interview process. Ask a lot of questions. Give candidates the opportunity to sell YOU on why they are the perfect fit. If they are lacking certain desirable skills, address this during the interview process as well. It’s important that there be full transparency at this stage.
7. Check references. One of the BIGGEST mistakes many startup founders make is not checking references when hiring an outsourced candidate. Unfortunately, technology makes it very easy for people to be less than honest and many startup founders have hired outsourced candidates, only to realize that certain aspects of their applications were embellished to try and give them a competitive advantage over other candidates vying for the same position within your organization. This is your business. Don’t simply leave it to chance.
8. Set up test projects. If you successfully made it this far, congratulations! You’re in the closing stretch. This likely means you’ve narrowed down your list of top 5 candidates down to 2 or 3. Send each candidate a small test project to complete. The test project doesn’t need to be something overly time consuming or complex, but it should include very specific instructions that are to be followed, as well as a firm deadline that must be met. You’ll be amazed at what you can learn about a potential candidate during this phase of the hiring process. The candidate who shines the brightest at this point is the candidate you should hire.
9. Get your new hire up to speed as quickly as possible. Now that you have someone new on staff, it’s time to start training, as well as assigning tasks to be completed daily or weekly. Whatever method of communication you use – email, IM, Skype, phone – be sure to be clear and precise with instructions so work is completed successfully. Ensure deadlines are clearly indicated and MOST IMPORTANT, be patient in the beginning since there will be a certain “getting to know each other phase,” where your outsourced worker will be figuring out how best to work with you and vice versa.
Remember that when you hire an outsourced worker, you need to take time to evaluate their skills and abilities. An unreliable or unresponsive worker may not only be a waste of money, but also a waste of time. However, a good hire can provide you with a reasonably priced, flexible, and competent worker able to complete projects and help you launch your startup business.
