You don't always need to hire: when outsourcing can be the answer

The workload grows, there aren't enough hours in the day any more, and the first thought that comes naturally is almost always the same: someone needs to be hired. It's an understandable reaction, but it often arrives before really understanding what the problem actually is, and hiring solves the situation only if that is indeed the problem.

The instinct to hire when the workload grows

When work increases, the mind almost automatically links more work to more people. In many cases that's the right answer. In others, a specific skill for a few hours a week is enough, or a different way of organising what's already being done.

The risk of following the instinct without stopping to assess it is ending up with someone hired, a long-term commitment made, and a problem that actually continues to exist because that wasn't the type of solution needed.

The real cost of hiring, beyond the salary

The gross salary is only part of the cost of a new hire. There are social security contributions, initial training, the time someone in the company has to dedicate to onboarding the new person, the tools and software licences to activate, and the risk, far from rare in a small business, that the role turns out not to be the right one after a few months.

Hiring is also a commitment that extends well beyond the first month of work: if the volume of activity that justified it were to decrease, that person remains a fixed cost regardless of how much work there actually is at that moment.

What tells you whether you really need one more person

Before opening a position, a few questions help you understand whether the need is really there:

• is the excess workload constant over time, or linked to a specific time of year or a one-off project?
• does it require a daily physical presence at the company, or can it be handled remotely, even by someone external?
• does it involve a task that repeats every week, or specialist skills that are only needed occasionally?
• does the company already have the structure to manage, train and supervise a new person, or would this add another burden to someone who's already struggling to keep up with everything?

If the workload is variable, the skill required is specialist, or the internal structure to manage a new person isn't there yet, outsourcing deserves serious consideration before going ahead with a hire.

When outsourcing works better than hiring

An external partner makes sense when the work to be covered doesn't justify a full-time commitment, when the skills needed would take months of training to build internally, or when the volume of activity changes seasonally and a permanent employee would be under-used for part of the year.

The main advantage, in these cases, isn't just financial. It's also the ability to access up-to-date, specific skills straight away, without having to manage the learning curve that a new hire would involve regardless, even for someone already experienced in their field.

We also discussed this in the article smart outsourcing for Swiss SMEs: lower costs, more efficiency, where the same principle also applies to other business functions besides administration.

When it's worth hiring instead

Outsourcing isn't always the right choice. If a task requires constant physical presence, in-depth, day-to-day knowledge of internal processes, or a level of direct control that only an employee can guarantee, hiring remains the more sensible route, even with a higher initial cost.

It's also worth hiring when the volume of work is already clearly stable and set to grow further: in that case, building an in-house skill becomes an investment that pays for itself over time, rather than a cost to minimise.

The functions SMEs most often outsource

In practice, some areas lend themselves to outsourcing more than others for an SME: administrative and accounting management, which we covered specifically in the article administrative outsourcing: saving on costs or boosting efficiency?, the IT side and technical management of systems, digital marketing, which requires skills that change rapidly, and specialist consulting tied to individual projects, where it makes no sense to build an in-house skill for a need that only arises once in a while.

How to decide without getting attached to a preconceived idea

To decide, it's best to start from the problem rather than the solution (hiring or outsourcing): what does the company really need right now, for how long, and with what degree of continuity. An honest analysis of these elements almost always leads to a clearer answer than it seems at first, when the urgent need pushes towards the first solution that comes to mind.

It's the same principle we follow with clients who get in touch with us, described in the article why we analyse first and propose afterwards: understanding what's really needed first, and only then pointing to the right path, whether that's a new in-house colleague or an external partner.

We also look after the IT and digital side that often ends up in the same dilemma, hiring an in-house person or relying on an external partner, with our hosting and IT support service. If your workload is growing and you're not sure whether the right answer is to hire or to rely on an external partner, get in touch: we'll look at the situation together before you take on a long-term commitment.