business operations

The pros and cons of hiring vs. outsourcing

Photo of Mikayla Fuller
by   Mikayla Fuller
April 20, 2023

Influx has built support teams for more than 300 high-growth brands in the US, Australia, and Europe. We hire, train, and empower a remote community with the top 1% of customer support agents, spread over 120+ cities. Learn more about how it works →

When it comes to expanding a business or taking on new projects, there’s a decision that companies often need to make: whether to hire new employees or outsource the work to an external company. Before making a decision, it’s essential to carefully consider your specific business needs and goals and then weigh the pros and cons of each option. We’ll cover the benefits and disadvantages in simple, digestible bullet points to help you make an informed decision that aligns with your expectations. 

The benefits of outsourcing 

Outsourcing is the practice of hiring a third party to perform tasks or provide a service that would otherwise be done in-house. Compared to hiring, outsourcing offers a range of benefits that may align with your business’s needs. Here are some of the benefits: 

  • The cost of hiring, training, and managing employees, as well as the infrastructure and equipment to keep a team productive, can quickly add up. Outsourcing is less expensive than hiring employees because you only pay for completed work rather than employee benefits, office space, and other overhead costs. According to Clutch, 59% of global companies rely on outsourcing to reduce costs. 
  • Outsourcing allows you to access specialized skills and expertise you may have yet to gain in-house. This can increase efficiency and improve quality. It also lets you find the best, most cost-effective option for your business. 
  • Outsourcing can provide flexibility to scale up or down as needed without the costs and risks associated with hiring or laying off employees. 
  • Outsourcing can improve competitiveness by offering better quality and lower costs while allowing you to focus on strategic initiatives that can drive growth and innovation. 
  • By leveraging the expertise of specialized service providers, outsourcing can help mitigate risks associated with in-house operations, such as regulatory compliance and security breaches. 

If outsourcing is an option you’re exploring, we would love to chat and walk you through any questions you might have about the various support solutions Influx offers. Maximize your budget with pay-as-you-go pricing that includes all training and management. Our full-service teams are on-demand and ready to help. Get in touch now

The benefits of hiring

Although hiring might be more expensive than outsourcing, it can be a long-term investment for your company. Here are some of the other benefits that come with hiring: 

  • When you hire employees, you have more control over the work they do and how they do it. You can provide specific instructions, make suggestions, and monitor progress. 
  • Hiring employees gives you the opportunity to select candidates who align with your company’s culture and values. This can help you create a cohesive team that works well together and shares common goals. 
  • Employees who are invested in your company and its success are more likely to be loyal and committed to their work. They are also more likely to stay with your company long-term, reducing turnover costs and maintaining institutional knowledge. 
  • Hiring employees can give you more control over your staff’s skills and expertise, enabling you to build a team with diverse talent. 

Whether to hire or outsource depends on your specific business needs and goals. Understanding the disadvantages of each may help guide you toward the right option. 

The disadvantages of outsourcing

Despite the many benefits of outsourcing, there are a few reasons businesses may choose to hire instead. Consider the following: 

  • Working with an outsourced team can be more difficult because they may be in a different time zone or have other communication preferences than your in-house team.

Influx has solved this problem using the ‘follow the sun’ model. This type of global workflow allows us to pass work between offices in different time zones to increase responsiveness and reduce delays. 

  • When you outsource a task or process to a third party, you give up control over how the task is performed. This can be problematic if the work is critical to your business operations and requires a high level of quality control. 

Outsourcing with Influx promises the utmost care and attention. We use custom reports to track agent success and compare their performance to benchmarks we create with you during the third phase of our onboarding process. Influx provides consistent, high-quality support in a simple month-to-month format. 

  • While outsourcing can be cost-effective in some cases, it can also be expensive depending on whom you outsource with. 

All of our plans include training and management with no setup fees. Our simple, pay-as-you-go model matches cost with revenue, and we won’t tack on any hidden or extra fees. For exact pricing breakdowns, get in touch

Although outsourcing has disadvantages, hiring also comes with its cons that should be carefully considered. 

The disadvantages of hiring

The BLS puts the median number of years that wage and salary workers have been with their current employer at 4.1 years. Compared to outsourcing, there are several disadvantages to hiring employees, which businesses should be aware of before making a decision. Some of the disadvantages include the following: 

  • When you hire employees, you are committed to paying them for a certain period, regardless of your company’s workload. This can lead to overstaffing during slower periods or understaffing during busier times. Outsourcing can offer more flexibility to scale with you. 
  • According to Gallup, the cost of replacing an individual employee can range from one-half to two times the employee’s salary. That means losing an employee with an annual salary of $80,000 can cost your business up to $160,000.
  • Finding and hiring the right employees can be a lengthy and challenging process. You may need to advertise job openings, sift through resumes, conduct interviews, and perform background checks. Outsourcing removes the concern for the recruitment process. 
  • When hiring, you will typically have a smaller pool of candidates. This means you have fewer options regarding both skill/experience and cost. This is even more applicable if remote work is not feasible for your business. 

There you have it; a breakdown of the pros and cons of hiring vs. outsourcing. 

 When to hire and when to outsource 

Knowing when to hire and when to outsource is essential for success. Evaluate the level of expertise required and whether it is a skill readily available within your organization. You should also consider your budget and whether you can afford the costs associated with a full-time employee, including benefits, payroll taxes, and training costs. Ultimately, the decision to hire or outsource should be based on a careful assessment of your available resources and your business needs and circumstances. 

Maximize efficiency, minimize costs, and outsource with confidence

We welcome you to read through our case studies to discover how brands like yours are working with Influx to achieve desired outcomes. Outsourcing to a trusted team of experts can free up your time and resources, allowing you to focus on critical aspects of your business. Reduce operational costs and remain competitive in today’s fast-paced environment. Find your support solution now!

About the author

Photo of Mikayla Fuller

Mikayla Fuller

Mikayla is an avid copywriter. If she’s not out on an adventure, you can find her somewhere with a book in hand.