The Business Benefits of Outsourcing to Freelancers

Victoria Doxat

Victoria Doxat IFP Expert

Tuesday, July 30, 2019

With HR struggling to keep up with the demand for new experts, and businesses unable to afford new salaries, is outsourcing the solution?

Article

The latest stats from the Office for National Statistics show that the number of self-employed people in the UK has increased dramatically over recent years, rising from 3.3 million in 2001 to 4.8million in 2017.

With the huge increase in the number of people now choosing to sell their skills in a freelance capacity, there’s never been a better time for businesses to outsource. In fact, it’s becoming more common as of businesses recognize the time and cost saving benefits of outsourcing their non-core business processes.

What is ‘outsourcing’?

Outsourcing is the practice of contracting out business functions to third party providers. This article focuses on outsourcing work to freelancers, but of course there is also the option to outsource to other businesses, or agencies to fulfil your business requirements.

Some of the most common business processes to outsource include human resources, accounting, customer services, research, design, marketing and content writing, but you’ll also find freelancers who can provide legal services, administrative support and even facilities or supply chain management. In short, if you can’t do it in-house, you can be pretty sure that someone out there will be able to do it for you, and usually at a fraction of the cost that it would take you to recruit someone to do it internally.

What are the benefits of outsourcing?

There are many reasons why it makes sense for a business to outsource a particular task or process. Some of the key benefits include:

Cost savings

Outsourcing business processes and functions to freelancers can help you cut your business costs. Freelancers only bill for the time they work, which means you don’t pay for wasted time. You can be assured that when you hire a freelancer, they’ll get the work done as quickly and as efficiently as possible, which let’s face it, is not always the case with your employees. Freelancers are also often more skilled or experienced in a particular area than your employees might be, and by outsourcing the project, or parts of the project, to an experienced freelancer, you save on training costs. Freelancers also usually work remotely so won’t impact on your overheads.

Increased efficiency

Choosing a specialist to provide the function you require will lead to a more productive and efficient service. With the right person on board you can also often produce a higher quality service than you could in-house.

Increased access to services

Outsourcing can provide you with access to services which may not always be affordable or accessible.

Greater flexibility

It’s often difficult for a business to be agile. It can take time to adapt to a changing market place and there’s often not the flexibility within the business to be able to change the habitual way of doing things. By employing freelancers to work on specific projects you’ll be able to work more flexibly.

Keeping it fresh

Without fresh ideas and new ways of doing things, you may find that your business starts to stagnate. You can end up doing the same things in the same way all the time, which means there may be a lack of originality in what you do. By outsourcing to a freelancer, you have immediate access to an outside perspective, which may be just what your business needs in order to move forward. It’s not always possible or cost effective to hire in new talent to shake things up, and so a freelancer could be a much better option.

Improved workflow

If your business is experiencing fluctuating work volume, it can be a really good idea to use freelancers to take up the slack when things are busy, and then when business is quieter, you let them go. Most freelancers operate on a retainer or a fixed term basis so you can plan for your busier times and ensure you always have all the resource you need. This is a much simpler and more cost-effective way of working than constant rounds of hiring and firing.

What do you need to consider when outsourcing?

You need to plan your outsourcing carefully. Firstly, you’ll need to identify exactly what type of support you need, when you need it and how long you’ll need it for. You’ll also have to make sure that you get the right person for the job. You need to check the qualifications, experience, expertise and references of your pool of potential freelancers and this will all take time. If you’re thinking about outsourcing, you’ll need to start planning months in advance. The good news is that once you’ve found a freelancer who’s a good fit, you can go on to work with them on future projects, so there’s no need to go through this process again and again.

What should you avoid when outsourcing?

When you first bring someone new into your business it may take a while for things to come together and your freelancer will probably have a lot of questions. This is only to be expected and the worst thing you can do is have an unclear brief or not take the time to ensure your freelancer absolutely understands the intended outcome of the project and their role within it. Communication is key, and the work of your freelancer will need to be managed in the same way as the work of your employees.

You should always have a contract in place with the freelancer, especially with larger, or more high profile projects. This minimises the risk of the freelancer disappearing mid-project, and also clarifies the expectations and responsibilities of both parties.

What should you look for in a freelancer?

There are thousands of freelancers out there and not all of them are going to be a good fit for your business. Some of the key things to consider when hiring a freelancer are:

Cost

It’s true that you get what you pay for. If you want a professional job done then you need to hire a professional to do it, and this doesn’t come cheap. Think realistically about your budget and be very specific on what exactly it is you want to spend your money on. It’s not just the freelancer’s time that you’re paying for, remember, but also their expertise. There may be a hundred freelancers who could do it for less but are they going to be able to add the same kind of value that a more experienced person could?

Location

Pretty much everyone can work remotely now, and this is why we’re seeing such a significant rise in the number of freelancers globally. It may be that you’re happy to communicate via email, telephone or Skype, but you may prefer to meet your freelancer face-to-face. How easy is it for them to travel to you? Are they required to work in-house? Does your project require someone to have knowledge of the local area?

Experience

Your potential freelancer should be happy to show you examples of work they’ve done for other clients, and to provide you with references. If they can’t do this, how confident are you in their ability to pull off the project?

Insurance

Is the freelancer insured? What does their insurance cover? For a large project, it would be sensible to only work with someone who has adequate insurance.

Do you like them?

They may be an incredible talent and tick all the boxes, but are you really going to be able to invest in a (possibly) long term business relationship with someone that you don’t get on with? How is this person going to fit in with your existing team? Outsourcing is supposed to make your life easier. If you have a bad feeling about someone, it’s probably best to walk away and find someone else who’s a better fit.

The smart choice

TheUndercoverRecruiter.com estimates that it costs on average £2,700 (circa $3,400) to hire a new employee. When you add in the costs of training, their salary and the additional costs of the employee benefits that a business needs to provide, the costs soon mount up.

Recruiting, hiring and training a new employee is expensive and it may be quite a while before your new employee is able to work at their full capacity. In fact, according to Investopedia, it may take over six months for a business to break even.

For all these reasons it may be that the smart choice for forward thinking businesses is to stop hiring, and to start outsourcing.

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