Hiring: The Good, The Bad and The Alternative

by Matthew Toren

2 min read

Every small business owner understands the pain points of hiring. It’s not only a challenge to get the right people, but also to keep them committed. High turnover costs small business owners time and money along with heaps of frustration. When you find the right people, you realize how valuable they are to your business.

Here are some of the pros and cons to hiring, as well as some alternatives to consider.

Hiring: The Good vs. Bad

The right employee provides you with a consistent source of leveraged time. When you get a dedicated, smart person positioned in the right role, your time is freed up to focus on your business. The well-suited employee also contributes more than just time. They bring valuable experiences and unique perspectives, as well as important personal relationships and contacts to help grow and scale your business. The right employee will boost morale, motivate your team and help you achieve the business mission. From a cost perspective, while employees can be an investment, they are a wise one when you find a good fit for the job.

As you are likely already aware, there are also downsides with employees. No matter how thorough your employment screening and vetting process, at some point in your business you’ve undoubtedly dealt with employees who become unproductive and develop attitudes, performance issues and attendance problems. At their worst, employees can become dishonest and untrustworthy. While these might be extreme examples, they do happen and make hiring employees seem risky.

Outsourcing: The Alternative

While every small business is different and there are definitely key players you’ll want to keep on staff as employees, one strategy that’s been extremely effective for my businesses over the years is outsourcing. Outsourcing provides you with some key advantages, and like anything, a few disadvantages to be aware of as well.

Outsourced contractors will provide the convenience of being easier to dismiss. As you know, letting an employee go is a delicate and complicated matter. With a bad contractor, you simply terminate on grounds of non-performance to the contract or don’t renew the contract. The process is much simpler when it is performance based.

Outsourced help can also be cost-effective. You hire someone for specific projects you need help with, and that person has no downtime – something that employees sometimes find for themselves. Your outsourced help has due dates for specific items and then you’re done when the project is complete. You’re not paying someone to sit around.

Outsourcing also has the benefit of less periphery paperwork and benefits. You don’t need to worry about payroll taxes, health care plan benefits or other expensive aspects of hiring employees. Independent contractors are expected to be responsible for their own taxes and benefits.

You do, however, need to consider the downsides of outsourced labor. In most cases, you sacrifice management and control. Outsourcing professionals often take on other jobs and you’ll need to work closely to keep your business a priority. Also, because they’re independent, they have less emotional buy-in to your business and vision.

Ultimately, once you weigh the pros and cons of both, the decision to hire employees or contract with outsourced help is yours. Often a hybrid approach is best for small businesses, hiring employees for the vital roles within your business while utilizing the flexibility and cost advantages of contractors for the remaining work.

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