What is Outsourcing?

Outsourcing is a business practice in which one company hires another company to provide external employees to perform an activity, instead of hiring them directly.

In other words, these workers are legally employed by the service provider, and not by the company which they are actually performing assignments for. There are some companies entirely dedicated to the outsourcing of staff for different areas: admin staff, technical or cleaning staff, and also programming and some more specialized sectors.

What is Outsourcing for?

Outsourcing is a hiring model that has gained increasing popularity over the last few years, in particular in Latin American countries, since it allows companies to reduce recruitment time and payroll management costs.

Advantages of Outsourcing

  • Workers can easily join technical or operative areas, fast and effectively.
  • The outsourcing company is on top of the recruiting and hiring processes.
  • Most of the time, staff availability is immediate.

Disadvantages of Outsourcing

  • What seems like lower hiring expenses is not always such, as the company usually ends up paying extra fees for the outsourced service, beyond salaries and employment benefits.
  • Outsourced staff does not develop a sense of belonging with the company. Therefore, workers are less reliable.
  • Outsourced staff turnover is very high.
  • Many people have had a bad experience with outsourced services.

See more advices in: 4 questions to decide: outsource your project or do it in-house?

Does it mean that hiring a freelancer is Outsourcing?

No. Freelancers are free agents deciding for themselves which companies they are going to work for and on which projects, as well as the terms and conditions of their work. The hiring conditions are not those of an employee-employer relationship, but rather as a client-service provider relationship.

Outsourced workers, besides, are not self-employed –they actually count on an employment contract with the company that fills in a vacant position of a client company with their profile.

You might also be interested in: How and when to add freelancers to your enterprise instead of hiring new employees

When to choose Freelancing over Outsourcing

Many profiles have usually been considered “ideal” for freelancing, like programmers and designers. On the other hand, companies are used to resorting to outsourced services more than to covering vacant positions in the operative and administrative areas, and also in customer service areas, such is the case of call centers.

However, remote work technologies have encouraged more and more people to go freelancing, as they get better working conditions than with outsourcing and they can also offer their services in quite a more versatile fashion.

From the companies’ perspective, hiring freelancers may also mean more significant savings than those of outsourced services. Besides, companies can control the type of professionals they’ll be working with.

It is advisable to choose freelancing over outsourcing, whenever possible, if:

  • There’s a good offer of specialized profiles
  • The work can be organized by fees, by projects, or divided into hours
  • It is not essential to perform the work at a given location

At Workana, you can find qualified freelancers skilled at a wide variety of areas such as admin support, programming, legal counseling, engineering, finance, etc. Before resorting to outsourcing, get to know the advantages of hiring a remote team of freelancers from our platform.

More tips for success hiring freelancers: How to pick the best freelancer for your project

What is Workana?

We invite you to know Workana, the leading freelance marketplace. We’ve been working since 2012 to keep connecting companies and entrepreneurs with remote workers of the most diverse specialty areas.

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