Advantages & Disadvantages of Outsourcing Jobs to Freelancers

outsourcing globeImagine walking into a building where there are no boundaries, no language barriers, and workers with an unlimited amount of skills and talents whose number one goal is to help you with your business.

That’s what is commonly known as “the cloud” – a place (albeit in cyberspace) that allows business owners to tap into talent around the globe and outsource jobs for prices that are reasonable and attainable, even for the small business owner.

The cloud of freelancers is accessible at places like oDesk, Elance, and Freelancer, where freelancers of every sort meet to bid on projects and connect with employers who need their skills. As an employer, you post a project, whether it’s for writing, IT, website design, data entry, administrative help, translation services, or anything else you may need. Then you simply sit back and wait for the bids and resumes to come in.

For example, you may decide to hire a talented graphic design artist from Indonesia for $11 an hour, a stay-at-home mom from the east coast for your admin needs, or a top web designer who simply prefers working for himself. You’ll pay them an agreed upon fee, but won’t be responsible for their taxes, vacation time, health insurance, or sick days.

Does that sound good? Here are three other reasons you should consider outsourcing to freelancers to run your business, and why you shouldn’t.

Benefits of Outsourcing

1. Get Fresh
No matter how much you try to keep your business culture fresh, eventually your staff will develop similar ways of thinking. It just happens. They all talk about the same project, and start to take on each others’ ideas. Pretty soon, the company culture is what leads the thinking in all of your projects, rather than individual creativity.

In the past, companies would bring in fresh talent to overcome this, but these days, entrepreneurs are looking outside for new ideas and concepts. By using freelancers to source your project, you’ll be able to tap into the minds and creative talents of hundreds of professionals – all of whom can bring new perspectives and innovation to your products and services.

2. Stay Steady
Anyone who runs a business understands the difficulty in keeping on a full-time staff when times are slow. Business owners usually have to choose the lesser of two evils: either carry the financial weight of employees during the slow times so they’ll have them in the good times, or let them go and start the hiring process again once business picks up.

With outsourcing, owners simply don’t have to make these kinds of decisions anymore. A freelancer works on a project by project basis and only gets paid when you have work to offer them. If you don’t have work, they’ll find it somewhere else – it’s the nature of their work, and they like it that way.

3. Pay Smart
Countless documentaries and news stories have been done on the amount of time that employees waste during work hours, and what that costs employers (e.g. time management tips to increase productivity). But to someone making their living doing freelance work, time is money. If they waste time during work hours, they simply won’t make enough income to live.

That’s why, when you hire one of these freelancers, you’ll be assured of two things: they’ll get the job done as quickly and efficiently as possible, and you won’t pay for wasted time. Work is completed on a per-project basis, so going in you’ll know exactly what you’re paying for, and how much it will cost. There are no surprises, no wasted time, and definitely no Farmville on your dollar.

Not everything is perfect though, and outsourcing is certainly no exception. Take a look at some of the negatives as well, so that you can make a balanced decision about whether or not this setup is right for you.

Drawbacks of Outsourcing

1. Reduced Interviewing Options
Occasionally, an employer will hire a freelancer that they believe is perfect for the job, only to discover that they don’t truly have the required skills. This happens because the interviews aren’t done in person, and the usual hiring checks and balances just aren’t there.

You can combat this by insisting on references and samples of applicants’ work, and even asking them to do a small trial project before awarding them the entire job.

2. Distance
When you use an off-site freelancer, you’ll lose some control over them because you won’t be able to monitor them. This means that if they tell you that they’ve worked on your project for five hours that day, most of the time, you’ll just have to trust them. This can be especially troublesome when you’re paying someone by the hour rather than a flat fee for a finished project.

Luckily, there are tools to help you get around this problem. Sites like oDesk and Elance offer monitoring systems that take time stamped screen shots of the project as the freelancer works online. Therefore, if you hired a graphic artist to create a logo and paid him by the hour, you would be able to see the various stages of the project in a series of screen shots, as well as the actual time it took to create it.

3. No Personal Relationships
It’s easy to get to know your employees when you work with them in an office setting because of the amount of time that you spend with them. On the other hand, it can be very difficult to form a personal relationship with someone whom you have never met in person.  Sure, you can communicate via email and phone, but sometimes you want to picture who you’re talking to.

Today’s technology helps those who want to work remotely with technologies like Skype. By only working with those freelancers who agree to use it, you can hold video conferences, or simply chat with them face-to-face. And while that may not be quite the same as forming a relationship in person, it’s certainly a step in the right direction.

Final Word

Most experts agree that it costs on average $4,000 to hire a new employee. For many small businesses that’s simply not realistic. Outsourcing has opened up a way for entrepreneurs to compete with bigger companies in terms of quality, product development, and general business practices. If you haven’t yet done business with freelancers, it might be time to take the leap.

What about you? Have you used outsourcing in your business, and if so, what kinds of results have you seen?

  • Zabrina

    Full disclosure: I’m a freelancer myself — article writing, to be exact.

    I don’t like Elance, Freelancer, or oDesk. Bidding sites in general make me bristle because of the general atmosphere there. It’s less of a cooperative “how can we help you?” atmosphere and more of a Southeast Asian marketplace where there’s lots of brightly-coloured fruit, but also chaos and people shouting at you everywhere to accept their bids because they have the lowest price… it gives me a headache!

    (Hmm… that analogy actually works. I didn’t expect it to. LOL.)

    I only deal with private clients through Constant Content, an internet marketing forum, and my own portfolio site. It’s too much work to create bids on jobs when you probably won’t get it unless you write really bad articles for a dollar each.

    But I’ve heard of people having success, so maybe I’m just not patient enough. :)

  • Your Gal Friday

    I’m a freelancer – Virtual Assistance, Business Administration. I wanted to address the “drawbacks” you bring up.

    Reduced Interviewing Options – Today’s technology allows us to chat with people face to face, even though we’re thousands of miles away. Skype + a Web Cam and you’re all set for your face to face interview. We can talk on the phone, we can video chat, we can live chat, we can email. Major corporations don’t do a lot of face to face interviews (they rely on contract houses) so they aren’t always assured of getting the right person in-house.

    Distance – If you have a problem relinquishing control, you shouldn’t use virtual help. It’s no fun for a freelancer to be micromanaged via chat and email throughout the day, and it’s no fun for you having to check up on someone every five minutes. Not everyone can work virtually.

    No Personal Relationships – This is something I completely disagree with. I’ve worked with different businesses, business owners and co-virtual workers. I have developed personal relationships with some of these people and consider them to be friends. You have to be willing to open up and embrace working together, even if you’re not in the same room. It really promotes a better working environment when you take a step away from work and just chat about things going on “in real life.”