Freelancer vs. Outsourcing Provider. Who Should You Choose?

outsourcing provider small business

Companies outsource with their own set of good reasons whether they’re a large corporation or a small business. Commonly to drive down costs, give their in-house team a boost, improve company focus and the list goes on.

If you’ve graduated from exploring the idea to finally taking action with outsourcing, the next step is to decide who to engage it with. There’s two options on the table. Hiring freelancers or partnering with an outsourcing provider anywhere in the world with countries like India, China and Philippines.

Both have their own list of pros and cons just like everything else. It boils down to what your company needs and its objectives for outsourcing. With that said, here’s a comprehensive comparison to help you make the right choice.

Freelancers

The Pros:
  • Going through freelancers will usually cost less.
  • Hiring freelancers are best for tasks that requires a specific skill set. You can easily search for particular skills in a freelancing platform such as graphic design, content writer, excel expert, etc.
  • You have access to a wide talent pool in an instant by using any freelancing platform. There are a ton of freelancers always waiting to work on their next project.
  • Freelancers can work on flexible hours like part-time and be hired on a short term basis. This is perfect if you need someone to fulfill a one-time project only.
  • There’s no minimum number of people to hire so you can start with one freelancer if that’s all you need.
The Cons:
  • You have to conduct your own selection process from start to finish. This is really labor intensive, taking time and attention away from your business.
  • Productivity issues may crop up. Even with a time tracking software, you still need to spend time monitoring your freelancers to make sure they’re efficiently working during the hours you pay them.
  • Freelancers are not exclusively dedicated to your company so focus is usually sacrificed. Good and reputable ones are known to actively work on multiple clients because they’re naturally in demand.
  • Confidentiality poses a higher risk even when an agreement is in place. Freelancers earn by working with a lot of clients such as yourself and they simply don’t have a lot at stake in the event a confidentiality agreement is breached.
  • Dependability may be an issue because freelancers are not exclusive to you and they also work from home with constant distractions.

Outsourcing Provider

The Pros:
  • You don’t have to do any of the leg work in recruitment because outsourcing providers are experts in this field. They carry out the entire selection process and will endorse highly vetted candidates for you to choose from.
  • Getting an outsourcing provider is best if you need people to perform complex tasks and the role can potentially evolve. They’re more prepared for changes as your company matures.
  • An outsourcing provider can provide a workforce dedicated to you. Most of these companies will not share your team to other clients to maintain focus and quality.
  • If you need several people in your outsourced team, going with a provider is a much convenient solution than hiring freelancers from different locations. A team is usually more collaborative and productive when working in the same space.
  • One of the greatest benefits of getting an outsourcing provider is having their collective expertise. Outsourcing agencies have the ability to streamline processes, set and manage key performance metrics, train future staff and provide constant recommendations to improve.
  • Outsourcing providers can produce long term, permanent employees who will grow with your company. If your products and services take time to train, you need people who will stay for the long haul.
The Cons:
  • Pricing is higher than going through a freelancer. This is because outsourcing providers have additional overhead costs like office space, taxes, healthcare, employee benefits, a full support team, etc.
  • The delivery time frame of getting an entire team setup may be slower. Providers go through a few rigorous processes to launch an outsourcing operation.
  • You may not get the level of attention you expect from an outsourcing provider despite paying higher than a freelancer. Not all clients are equal and there are times you won’t get the same level of service. If you’re an SME, choosing an outsourcing provider who specializes on your company size will prevent this.

Who Should You Choose?

The best answer lies on how many people you need, the budget you’re willing to spend and amount of effort you can pour into outsourcing.

Hiring freelancers is the way to go if you’re looking to hire very few people under a strict budget and you have more time on your hands. In contrast, partnering with an outsourcing provider is your best option if your time and energy is limited, you need several people dedicated to you and getting the lowest price is not your number one priority.

To find out more if an outsourcing provider is a better option for your company, start a conversation with us today.