Outsourcing vs. In-House: The smart business owner’s guide to resource allocation

Your team is feeling the pressure, but that’s a good thing. When your workload increases, profitability often follows. However, when your team feels the pinch of increased expectations and workload, business owners need to provide relief.

Prevent burnout and maintain target outputs by getting a pulse on your teams’ resource needs. Identify existing or emergent staffing needs and develop a plan to fulfill them. Whether these needs exist today or are on the horizon, you’ll have a strategy ready to deploy.

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1. Consider the Nature of the Work

Your business needs may represent an expansion of existing staffing or align with a special project. If your accounting team is overwhelmed with tasks and deadlines, additional support may help them be more successful. In this situation, look beyond the human element to determine potential solutions. In some cases, hiring, full or part-time support may ease your teams’ challenges. However, upgrading your software may provide the relief your employees need and yield many long-term benefits.

Leverage invoicing software to establish repeatable processes and actions when a quote or appointment is made. Your in-house team will need to assess all the steps and deadlines needed to set up their system. In the integration phase, you may need short-term staffing to cover administrative tasks while your experts focus on software setup.

Work with your software vendor to access training modules, support teams, and their integration group to ensure a smooth transition. Collaborate with your management and training teams to ensure your new software and its capabilities are incorporated with your procedures. Once your invoicing software is up and running, your teams will save time thanks to invoicing automation and reporting.

2. Be Realistic About Your Budget

Every business has seasons of growth, but get real about where your business pressure stems from. If you’ve rolled out an exciting product and are experiencing record demands, it may be too soon to hire. Analyze the past performance of prior rollouts and when demands begin to even out.

Identify the real cost of hiring and determine how much you can invest in bringing on additional support. It takes time for managers and individual contributors to train new teammates, which you may not be able to accommodate.

Outsourcing often reduces costs since long-term investments like salaries and benefits aren’t relevant. These costs can fluctuate over time, especially as team members grow with the organization and receive salary increases. Contract work sets a target budget and hours you can incorporate into your annual budget, reducing surprise expenses and increases.

3. To Scale, or Not to Scale

As a leader, you’re in the driver’s seat of your company, with many buttons and levers at your disposal. When determining your resource needs, you’ll want to determine when you’ll need support and how much of it. If your business is sensitive to seasonality, outsourcing may provide better alignment with business demands.

For example, a specialty flooring company may have periods of greater demand in the summer for its education clients. When schools are out of session, administrations have a very tight window to complete improvement and maintenance projects. In this example, a leader can hire contract labor, which can increase the hours worked and jobs accepted. Conversely, this busy season can increase demands on office staff, which can be enhanced too. The aforementioned invoicing software or additional administrative tools like on-demand scheduling and even human resource tasks can benefit here.

If you determine that your staffing needs are long-term and sustainable for your business, a direct hire may be the way to go. Although, long-term software in the system, additions may function similarly to those of direct hires as integration and contract renewal would be part of your annual budget.

5. Quality Controls and Constraints

Every business has a standard of excellence, but some standards are more important than others. That’s not to say that completing quality work on time isn’t an industry-wide expectation, but some pose risks for non-conformance.

If your business has safety, security, and quality standards, be prudent in your decision-making. Industries like construction have standards for project completion, but also among qualified workers. Those that have a governing body, certifications, or unions, may provide more reliable quality contract workers than those that don’t.

Organizations handling personally identifiable information may be best served by hiring full-time staff. While you may still conduct the same background checks on contract work the motivation to protect company and client data may be better in a long-term employment setting.

Assess Your Needs Methodically to Determine Next Steps

Work with your leadership teams to develop a rubric for when increased support may be needed. Assess one-time major projects as well as daily demands to accurately represent opportunities. Analyze employee feedback to get a pulse on company culture and burnout risk. If you suspect your teams are overworking, but not elevating concerns, seek out truth through candid conversations and anonymous surveys.

Let them know that prioritizing balanced, workloads, and properly staffing teams is important to the organization. Encourage colleagues to weigh in on business demands as there may be nuggets of insight that surveys cannot reveal. Create a repeatable process to conduct this exercise annually or whenever you suspect needs have changed. With a repeatable process, you’ll obtain data to guide your decisions and investments in both people and your bottom line.