Should Freelancers Outsource? Pros and Cons

If you are a freelancer and you’re contemplating outsourcing, know that it’s the happiest possible situation. Why?

Should Freelancers Outsource? Pros and Cons

It means that all is well with your business, and you are getting more work than you can handle. Remember the moment you decided to take the plunge and become a freelancer. You probably didn’t plan to be content with just staying afloat individually; somewhere in the back of your mind you probably imagined growing your business and becoming a competitive firm.

I still remember the days when I began to consider quitting my well-paid full-time job to pursue my dream of becoming an entrepreneur. Sheer belief in my own capabilities led me to believe I could make it big someday. A long while back, I had started to visualize my journey to the top, and I was not dreaming of having my hands full of never-ending work. Instead, I imagined being in the position to run a business, taking one step at a time and eventually having a brand image.

I was always aware that I would have sufficient work within a year of freelancing—sufficient enough for me to think about delegating. That’s when I had to have this debate with myself: whether to hire employees or to outsource the work to other agencies. Plenty of thought went into this debate, and I was never too keen on either of them.

I’m going to take you through all the pros and cons so that you can decide whether outsourcing is a feasible option for you.

Outsourcing: What Is It?

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Not many are unaware of what outsourcing is, especially amidst the current debate about offshore outsourcing to countries like India, the Philippines and China (which is having a huge impact on the unemployment problems in America). Most feel that one of the major reasons for the severe financial crisis in the U.S. was the increasing number of jobless people; jobs were being outsourced to increase profitability.

The word “outsourcing” didn’t make its way into English dictionaries until the late 1980s. It often refers to subcontracting a business operation to another firm that specializes in the particular line of business (so that relevant work and details are taken care of by the subcontractor), and it’s usually done to save on costs.

Why Outsource?

No industry has remained unaffected by the concept of outsourcing. Small and large businesses alike—in manufacturing, customer service, banking, education, law (almost every area of work)—opt to outsource with mixed results. Some business giants have outsourced their operations offshore to enjoy the benefits of currency exchange and reduced labor cost.

Outsourcing has seen rapid growth in the last ten years and is expected to grow. Most experts and trade critics limit the benefits of outsourcing to reduced costs because of the lower cost of labor offshore, but it goes beyond financial benefits. Of course, there are advantages and disadvantages, as with most things…

Advantages

Let’s take a look at the potential advantages of outsourcing in general:

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01. Specialization

You can enjoy the benefit of getting work done by experts who specialize in a particular field. There are many instances in which you find yourself ill equipped to serve your clients, and that’s when you can outsource. Service providers deal with a lot of companies and have experienced staff that can deliver results day in and day out.

02. Time management

Outsourcing can be a huge time saver. When you outsource, you can more or less forget about researching and experimenting; find a good service provider and clearly communicate what you want.

03. Cost reduction

Outsourcing primarily came into prominence because of its immense financial benefits (one and all would agree). A service provider can work for a lower margin than you can simply because they specialize. Let’s say you have to get your back-office operations set up for your expanding business. It not only attracts a huge amount of cost overheads, but it consumes time that could have been utilized in other ways. With outsourcing, you’ll be in a win-win situation.

04. Increased efficiency

Outsource certain aspects of your work to ensure that you won’t have to worry about executing something you’re not an expert in and to save time and funds that can be utilized efficiently elsewhere. You’ll see an increased efficiency in your business as a whole.

05. Focus

Outsourcing lets you focus on the core line of work that your company does. For example, a sales organization would enjoy the time saved by outsourcing its back-office operations by focusing on increasing its sales portfolio.

06. Increased productivity with quick turnaround

Get a taste of outsourcing first-hand to understand what I am talking about. Plenty of small companies can deliver with unimaginable accuracy. I have had first-hand experience with this. For continued work and the benefit of currency conversion, offshore agencies are immense benefits—though I sometimes wonder how capable they are of delivering what we need at low cost.

07. The power to choose

Wouldn’t you love to be in the shoes of a decision maker and feel empowered to choose from hundreds of available service providers? You’ll have a dearth of agencies to choose from and you’ll get them doing exactly what you want.

08. Reliability

You get what you pay for because you made an arrangement with a service provider and you have the power not to pay if the work is not done in accordance with prior agreed-upon terms and conditions.

09. A weight off

Your business is growing, and the overhead costs increase as you increase hiring, training, infrastructure, employee benefits and what not. Wouldn’t you rather let the service provider deal with all this while you take a nap? What’s at stake is cost, time and energy!

10. Flexibility

Wasn’t this one of your primary motives for becoming a freelancer? You can do what you want, go on unplanned vacations, and spend evenings with your family, all while knowing that work is on its way and all you need to do is check its status.

Disadvantages

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01. Compromised quality

It might happen that the quality of the finished product is lower than expected and you have to deal with the repercussions. Your brand is at stake, so be careful and precise while choosing a service agency.

02. Increased burden of cost

I’m elaborating on the first point. If the end product is not acceptable to your client, you might have to opt for another agency and have work done all over again. You could end up paying twice for one piece of work.

03. Communication gap

There will always be a gap in the communication process when there are three parties involved in a project. The amount of loss in knowledge transfer from your client to you and then to your outsourcing partner will have some effect on the project.

04. Time consumption

You are a freelancer, and you like working according to your own schedule. It’s possible that you find it tough to get in touch with your outsourcing partner as and when you need to. You could just be looking for an update on the project or want to make some modifications to a finished project. You could waste a lot of time and feel stress.

05. Cultural barriers

Different lifestyles and religious beliefs influence people’s thought processes, and levels of understanding can vary greatly. This could impact the quality of the work.

06. Language barriers

To elaborate on the last point, non-native speakers of English differ in their levels of comprehension at times, even though it has become a commonly used language all over the world. Language barriers can create certain errors and blunders that you can live without.

07. Professional reputation

Before deciding to outsource, consider the fact that your reputation is at stake. Clients have expectations that are based on your past performance; you have earned yourself a reputation and now you are going to be responsible for and associated with the work you’re having done by others. The biggest stakeholder is your brand.

Questions to Ask Yourself Before You Outsource

  • Are you consistently burdened with work that you can’t handle?

    When you are overloaded with work and struggling to catch up with deadlines without compromising quality. Well, being busy is not a good enough reason to outsource. You’re the best judge, though. Think about consistency; if you are consistently getting an amount of work that you can’t handle alone, it’s time to grow your business.

  • Do you have committed clients whose projects require skills that you don’t possess or have not mastered?

    As a designer, you might not be an expert at coding. Or perhaps a regular client has an ongoing requirement for Flash design. Maybe it’s time to delegate and enjoy the benefits and accolades.

  • Is your business large enough for you to think about outsourcing your back-office work?

    Most freelancers are not good at the back-office part of the business, and it takes a lot for them to get everything together when filing taxes. You could be a candidate to consider outsourcing this type of work.

  • Are you planning to expand?

    Even if you’re not already a successful freelancer, there is no harm in thinking big and planning to expand your business. You might want to get more and more clients and have work done by other agencies. Not only does outsourcing prove to be cost-effective, it allows you to oversee many projects at the same time.

How to Approach Outsourcing

Let’s assume that, having had a look at all the pros and cons associated with outsourcing, you decide that it is a viable option for your expanding business. It’s clear that there are benefits to be enjoyed, but you ought to focus on how to compensate for the risks involved. Pre-outsourcing, plan and strategize so that your efforts aren’t wasted.

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  1. Analyze projects yourself; find out exactly what amount of work each assignment demands. Understand the nature of every project as well as the details involved. You’ll then be well prepared to communicate the same to your partner agency. Be precise about what is required, and don’t omit any key pieces of information shared by your client.
  2. Make a grid structure of the skill sets required to effectively perform the tasks that you most commonly perform. Assign ratings from one to ten for respective skills depending on the nature of the assignments. You’ll be able to pinpoint a partnering agency by matching their expertise to the needs listed in your grid structure. It can be difficult to choose the best outsourcing partner from hundreds of available options.
  3. Watch out for scammers and fraudsters. Do background checks with all possible resources before getting into business deals. Look for websites that provide a platform where recruiters and freelancers can get in touch. Usually, in such circumstances, you’ll pay money to the other party only after you accept the finished project—and that is safe for you. Popular examples are ODesk and eLance.
  4. Get a clear picture of the financial constraints if there are any. Plan your budget and make decisions beforehand for each project.
  5. Prepare and sign a contract, especially if you are looking for a long-term business relationship. This will likely eliminate the risk of being scammed.

Conclusion

Having gone through all the possible pros and cons of outsourcing your work to a third party, it’s now time for some action. You’re in a better position than ever to make an educated decision about whether it’s feasible for you. I have been doing so and, with a keen eye and good planning, I have had favorable results.

I’m pretty sure I’ve covered everything, but feel free to add to the comments section. Let’s make this article as beneficial as it can be for all community members.

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9 Comments

  1. Compromised quality, Increased burden of cost, Communication gap and
    Time consumption I agree and don’t agree.

    It all depends on the type of Outsourcing Company you select. The best advise is start with small task with any outsource company. This will help us to get experience.

    The moment you’ve vendor who act as Outsourcing Partner then your business can see great moment w/o taking much risk that’s sure.

  2. As a developer, I actually have a few clients that are designers/developers themselves that outsource work that they don’t have the time/skills to do. It’s great for me, because then I get extra work but I don’t have to manage the client piece (which as we all know, can eat up a ton of time and often isn’t billable time).

  3. Nice and helpful post. Taking an organized approach(having checklist etc) to outsourcing is fine, but would like to add in that not all projects can be outsourced. Moreover every freelancer has his/her own way of doing a thing and that can be a great source for satisfaction. The guy you are outsourcing to, may have a different style of doing things and can lead to confrontations and anxiety and work getting done but not upto the satisfaction level you would like it to be.
    For freelancer, outsourcing should only be done to a guy, whom you know well and share the same values, style and work ethics.

  4. The pro’s definitely seem to outweigh the con’s, and I’m not just referring to the list you have above. I feel good enough to accept a slight loss of control at times if the project is still going to get completed and finished at a low operating cost.

  5. Very well written article. You present great points for each side. A lot to think about.. Thanks for sharing!

  6. This is a very good article, I could not agree more on lots of the points. I have had a project out sourced and like you mentioned I had to find another person to clean up their sloppy work. Its a tough call but if you need to do it, then find someone reliable and stick with them, remember you get what you pay for.

  7. Thanks Daniel for a lovely and very informative read. My experience: Outsourcing with partners creates more business! Pros outweigh the Cons. Something about having to kiss a few frogs…

  8. Nice post Daniel. looks a very complete and authentic post, you covers everything in this post. fully agree with your all the advantages and disadvantages they are very very useful to keep in mind.

  9. Really the information which you have shared is awesome.I am totally agreed with your all points.Thanks for such a nice post.

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