Thanks to the Internet and cloud-based applications, you can now hire staff from anywhere in the world. Not only that, you can also choose from a number of different hiring models.
However, it’s important to choose a model that works not only for your new employee but also for your business. They all have their pros and cons, and choosing the wrong one (or setting it up incorrectly) can lead to not only expense and heartache but also potentially losing face with your clients.
Here are the three main models you can choose from, along with the pros and cons for each one.
The Freelancing model
With the freelancing model, you engage the person through avenues such as Upwork, Freelancer, etc. As long as the person has the skills you need and understands what they need to deliver for each task, this arrangement can be a very cost-effective way to add a new employee/consultant to your team.
However, making sure they have the necessary skills takes time, and there’s no consistency in either the quality of the service or the training/expertise you may need to provide. And some of these sites are notorious for people underquoting to get the work and then not being able to deliver on their promises.
- Usually cheaper
- Can be a direct employee/consultant in your organisation.
- No consistency in service quality
- No standard of training or expertise you need to provide
- No guarantee of commitment
- Chance of people over-promising and under-delivering.
The Outsourcing model
Under the outsourcing model, you arrange for an outside entity (usually located overseas) to perform a specific task for an agreed fee. It’s a great arrangement if you only need part-time help, or want to get a specific task completed without hiring someone full-time to do it.
You don’t have to worry about finding a person with the necessary skills and training—the provider takes care of that so you can concentrate on servicing your clients and growing your business. They’ll also look after any HR issues, including productivity levels and dealing with staff absences. You only pay for the services you need, and because it’s a fixed fee you can offer your clients a fixed fee service.
Unfortunately, all this expertise often mean you’ll pay them more to do the work than you would a staff member. And you don’t always know who’s actually doing the work for you.
- You can offer your clients a fixed fee for the work
- The provider looks after training and any HR issues
- You only pay for the services you need
- The provider looks after any productivity level or downtime issues
- You don’t need to employ a full-time person
- Staff are professionally trained and specialise in the work being provided
- The provider will fill the gaps during staff absences to ensure your work is still completed
- You can focus on servicing your clients and growing the business.
Labour costs are often higher to cover downtime, leave, etc., as well as the provider’s investment in training
You don’t always know who’s actually doing the work.
The Offshoring model
Finally, there’s the offshoring model where you employ a staff member working in another country. This arrangement is great when you need a full-time dedicated employee, but want the advantages of having a member of your team offshore.
You’ll really get to know your new staff member, who’ll be dedicated and answerable to you and only you. That means you can train them specifically for your business, and have them follow your processes and procedures as they carry out their work. And as long as you have enough work to keep them productive, their hourly rate can be quite reasonable. And if you go through a provider, you don’t have to worry about any additional training or HR issues.
But there are disadvantages. Because they’re dedicated specifically to you, if they’re absent or go on leave you’re effectively a team member down. And if they quit, then you have to go through the whole process again. You may also need to do all the selecting and training yourself if you don’t go through a provider.
- You know (and can get to know) the staff member you’ve engaged
- They are dedicated to you, and answerable to you
- Their hourly cost is usually cheaper (providing you have enough work to keep them productive)
- You can train them to perform tasks in a specific manner to suit your processes
- If you use a provider, you won’t have to deal with HR issues or provide additional training.
- If they leave then you’re back to square one
- There’s no backup if they’re absent or on leave
- If you don’t have the work to keep them productive, their effective hourly rate can climb quickly
- If you don’t work through an offshoring provider you’ll need to select and train them yourself.
Which option should you choose?
So there you have it: the three most common models for hiring additional resources for your business. So which one should you choose? Here are our suggestions.
The freelancing model works best where:
- price is a major issue
- you have the time and resources to deal with any training or HR issues.
The outsourcing model works best where:
- You only need specific tasks to be done, or have a one-off task or project
- You’re growing your business, and don’t have the work for a full-time staff member
- You need to temporarily increase your staff numbers to meet deadlines.
Choose the offshoring model if:
- You have enough work to keep them productive
- You have the resources to supervise them
- You have systems in place to manage and monitor their workflows.
Want to know more about these different options, or need help deciding which one is best for your business? Get in touch with us today, and we’ll help you make the right decision.