A Business Owner’s Dilemma
As a business owner, you are eventually faced with the issue of having too much work and not enough hours in the day. You find yourself at a point where you have to hire others to join you to tackle the operations of your business.
In this article, I will debate the pros and cons to hiring remote freelancers versus in-house employees. Many business owners don’t fully recognize hiring online freelancers as a viable staffing strategy because of the poor reputation that it has received in the past. Before comparing pros and cons, I’ll introduce the different staffing options that business owners have as they scale out their workforce.
Staffing Options for Businesses
Let’s first look at all of the options that businesses have for hiring new employees.
Option 1: Friends and Family
Some businesses choose to keep everything within their family making most of their hires through relatives and close friends. Dependent upon the success of the business, this option can turn out great or cause riffs between families. Many small business owners practice this strategy.
Option 2: Online Resources and Freelance Platforms
Businesses have many online resources such as websites they can use to look for help (i.e. Monster.com and Indeed.com as two of the larger sites). Post the role that you are seeking to fill and track as applicants enter their information to move through the interview process. This has become an extremely popular form of hiring for business owners as the Internet has had more and more of an impact on staffing.
Option 3: Staffing Agencies
Staffing agencies can be popular for businesses that don’t want to spend the time on recruitment and interviewing, but are looking for high quality workers within their area. This option tends to cost a bit more of a premium because you have to compensate the staffing agency for finding you the workers.
Option 4: Hiring Remote Freelancers
Online hiring has been around for over 30 years and has become even more mainstream with the creation of online hiring platforms. Upwork (formerly Odesk and Elance) is one of the largest online hiring platforms today and there are handfuls of others as well where business owners can search for remote freelancers with specific skills needed for their business. Businesses are first attracted to these online hiring platforms because of the lower rates at which they can hire people.
The first three options tend to result in in-house employees that are from your area and are able to come into your office to work their required hours. They have health benefits, vacation plans, and other benefits of being a part of your company. The fourth option tends to result in people from around the world that work for your company through the Internet on a contract basis.
Pros and Cons of Hiring In-House Employees
- Potential for more intelligent and specialized employees invested in long term
- The employees are physically working with you everyday
- It is easier to develop trust with the employee
- It is easier to onboard the employee in person and develop a working relationship
- At or above market rates in your city of residence with higher cost of employee benefits
- As owner, you are glued to your office and limited in terms of physical mobility
- More HR issues to deal with as more workers are hired
On the other hand, you have hiring remote freelancers from online platforms. Very similar to hiring in-house employees, there are a number of pros, but also an equal number of cons.
Pros and Cons of Hiring Remote Freelancers
- Ability to recruit talent from all over the world
- Tend to be cheaper per hour and require minimal or no HR benefits
- Ability to run your business from anywhere with Internet
- Communication –> poor English or communication habits
- Reliability –> not all remote freelancers are home runs and can disappear without notice
- You may never meet the freelancer in person
The Deciding Factor
Which strategy you choose to employ should very much be based off the current stage you are in with your company.
If you’re just getting off the ground and need part-time people to assist you in your daily operations, I highly recommend hiring remote freelancers.
The same goes for when your company has grown to a point where there are hours and hours of repetitive tasks that don’t require extremely skilled individuals to complete.
However…if you’re at a point in your business growth where you have steady cash flow and you need to add an expert to your business, I recommend hiring an in-house employee that you can trust to excel, lead, and manage.
As a general rule of thumb, reserve in-house hires for experts that are going to be focused on the growth of your company. For operational tasks, look first to hiring remote freelancers.
Connor Gillivan is the author of Free Up Your Business: 50 Secrets to Bootstrap Million Dollar Companies, a serial entrepreneur, and the CMO and co-founder of FreeeUp.com. When he’s not bringing together hundreds of freelancers and business owners, he’s mentoring entrepreneurs through his site, ConnorGillivan.com. He currently lives in Denver, Colorado.