Hire In-House or Outsource to Freelancers?

As a business owner, I’ve been on all sides of this issue. When deciding whether to hire staff or contract with freelancers, one answer will not fit all companies or situations. However, there are factors to think about with each category.

In-House Team

Tacit knowledge

• Pro: This person usually goes through company training and spends day after day in your environment. They will have insider knowledge on your company and products that a contractor won’t.
• Con: Sometimes it is nice to have an outsider come in for a project with fresh eyes.

Capacity for volume

• Pro: When you have someone on payroll, you can keep them busy everyday, even with little projects.
• Con: Are you getting your money’s worth or are you just keeping them busy?

Fixed cost

• Pro: The salary and employer costs are fixed so you can budget accordingly.
• Con: When times are tight, this is another line item on your payroll.

Freelancers

Specialized experts, potential crew

• Pro: When bringing in a person or team for a specific job, you make sure to hire the perfect fit for the project.
• Con: This perfect fit might be costly.

Project specific

• Pro: Many times an employee can be pulled in multiple directions and a project can be delayed. Having a dedicated team to deliver the project when everyone else is focused on something else can be a huge win.
• Con: Because the freelance team is focused, you might need to find time to respond to them or review assets when you are busy on other projects.

Control costs

• Pro: Contracting makes it easy to eliminate the expense when the need isn’t present.
• Con: Money needs to be found or approved in order to take on special projects. 

The list above is lots of nice things to consider but I’m not sure any one, alone, will push you to a decision. I’ve always been slow on hiring people because it seems that in our world, specialty projects have seasons. Sometimes, everyone wants animation and you cringe that you are paying an animator contracting rates. But then when there isn’t any animation work, you are grateful that they aren’t on the payroll.

So you have to pick your fight: On staff availability? Or less employer obligation?

I’ve been trying to find a formula that would help me make a smart decision and I’ve nailed it with equipment but can’t hone in on it for people.

When we rent a piece of equipment enough times that we’ve paid 40% of the purchase cost within a year, then we buy it because clearly, we need it. Plus, by owning, we aren’t losing time doing pickups and drop-offs.

I’m interested to hear your thoughts on this list of criteria to consider, as well as my formula. Maybe you’ve found the people formula that I’ve been missing.