When new projects come up or workloads become overwhelming, one of the frequent decisions that needs to be made regards hiring and contracting. When should you hire and when should you contract work out? Both solutions have their benefits and drawbacks, and the right one is dependent on a number of factors.


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The Advantages

Control – You have greater control over the time and approach used when you insource. As the boss, you set the hours and guidelines for the new recruit to follow and you decide on the flexibility allowed. If you feel the project would benefit from being managed in-house as opposed to through a partnership with an outside firm, hiring someone full-time may be the better solution.


The Disadvantages

Geographical limitations – Locational restrictions can make it a challenge to find the right talent if you want your recruit to work onsite. If you’re located in a rural area or a region that isn’t exactly a hotbed for the expertise you require, the candidate pool may be very shallow.  

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Increased risk and commitment – The obligations and risks involved with hiring someone should also be taken into consideration. Bringing a new employee on staff goes hand in hand with a long-term payroll commitment. If the business relationship is not working out, it’s more difficult to cut ties. Severance can be costly and wrongful termination lawsuits are frequent, having risen by 260% in the past 20 years.




The Advantages

Expertise – If the work you need done is technical, contracting a firm that specializes in such projects gives you access to a deeper pool of expertise. For instance, if you’re looking to develop a mobile app for your business and you contract the work out to NapkinBetaBeyond, you’re essentially hiring the entire NapkinBetaBeyond team – a team which not only has decades of combined relevant experience, but also has prior exposure to a wide range of projects and solutions. If you choose to hire a single developer to join your staff, on the other hand, he or she will likely have less experience and limited diversity in their portfolio.

Access to resources – On top of expertise and experience, you also gain access to the resources that the contracted firm has available to it. There’s no need to spend thousands of dollars on the hardware and software programs necessary to develop the app for your business because the contracted firm already has those tools on hand, most likely.




Temporary – Contracting is a great staffing solution for temporary projects. When the contract is complete, there’s no continuing payroll commitment, reducing your company’s risks and obligations.


The Disadvantages

Limited availability – The contractor you want to hire may not be available right away, especially if they have an outstanding reputation and receive many referrals. Additionally, they may not be available Monday through Friday from 9 to 5 once hired. Many contractors undertake work for a number of companies simultaneously and only have a limited amount of time in their week portioned off for your project. Make sure to discuss timelines, schedules, and your requirements before entering into a contract with an outsourcer so that no misunderstandings come up.



Which solution is the best one for your business depends on the scope of the work needed, the expertise required, and the control you want over the entire lifespan of the task or project. Just like insourcing, contracting is a valid staffing solution that can benefit your company greatly, especially if your project is temporary and requires expertise and specialized skills.


What are your thoughts on hiring vs. contracting? Tweet us and let us know you think the right time to outsource is.