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In-house vs outsource: what’s best for your trade business?

In-house vs outsource, both will get the job done, but in very different ways. So what's the difference, what are the positives and negatives, and which of these resourcing options will alleviate your stress levels and your workload to the greatest effect? Let's take a look.

Making the decision to keep certain jobs in-house vs outsource is not always straightforward, and trying to figure out the best option for your business is not easy.

There is no ‘one-size-fits-all’ solution. So, in this post, we’ll explore the pros and cons of each to help you make an informed decision about what’s best for your trade business.

Choosing between outsourcing or in house

Let’s first outline the meaning of ‘in-house’ and ‘outsourcing’:

  • ‘In-house’ refers to an activity or operation that’s performed within a company using its own employees and time.
  • ‘Outsourcing’ is when a business hires the services of someone outside of their business to undertake tasks or complete business activities.

Outsourcing allows you to spread the load by working with outside experts, for as long as you wish. In contrast, in-house requires you to commit to a long-term hire with fixed costs related to salaries and benefits.

In house vs outsourcing examples

As a professional tradesperson, your evenings and weekends are precious and can so easily become swamped with admin and paperwork.

It can also be challenging to balance getting your current job done while answering new customer enquiries and lining up the next job.

Then there are the jobs that are critical to your business but you simply dread or consume too much of your time. Yes, we’re talking bookkeeping and accounting!

If this sounds familiar, you have two options to help you manage the juggle:

  • Keep it in-house: employ someone (either part-time or full-time) within your business
  • Outsource call handling, email enquiries, appointment booking, paperwork, bookkeeping and accounting (yes, it’s all possible!)

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In house vs outsourcing pros and cons

With more of a grip on what in-house and outsourcing mean and some of the typical tasks that can be outsourced, let’s look at the pros and cons of each option.

In-house: pros and cons

With all your business activities in-house, you have complete control over every aspect.

You have a dedicated team of employees that you can train and develop to deliver the services you need, to a desired standard.

However, hiring employees can be expensive.

Recruitment costs time and money. Other costs are also involved, such as providing a workspace, equipment, training, salary, and benefits.

On top of that, you’ll be responsible for having the correct insurance and covering the HR requirements too (sickness, absence, holiday requests etc.).

Outsourcing: pros and cons

Outsourcing certain tasks can be a great way to save money and increase efficiency.

It can also be a very quick solution – you can have a new function set up within days. And remember, you’re outsourcing to an expert, not someone who needs to be trained up, so you save time in that regard too.

What’s more, as a small business, you might only have the budget for a part-time assistant, but outsourcing opens up the possibility to afford a more experienced professional.

And if you’re nervous about committing to a permanent hire, outsourcing gives you the scope to enter into a more flexible arrangement – choosing how much support you need and for how long. This can usually be altered at fairly short notice too, so you stay in control of the cost.

Do remember though, that you will need to let go of having full control of the quality and timing of the business activities you choose to outsource.

You may also need to accept there could be challenges with communication, especially if your outsourcing provider doesn’t work the same hours as you.

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When should a company outsource?

As we mentioned earlier, there isn’t a one-size-fits-all answer as to whether you should outsource or keep it in-house. It varies from business to business and task to task.

Here’s a selection of questions you can ask yourself to help decide:

What business activities are most time-consuming or painful for you?

As a plumber, for example, your core skillset is within plumbing-related tasks. You might not have the time, resources, or expertise to handle your bookkeeping and accounting.

Outsourcing will help to improve your efficiency, focus on your core competencies, and trust these tasks to experienced professionals.

What’s your budget?

As a small business, you may not yet have the funds to employ someone. Outsourcing, however, gives you access to high-quality services in a more cost-effective way, helping you to keep your costs under control.

Are you willing to relinquish some control?

When should an organisation choose not to outsource? Well, if you prefer to maintain a high level of control over your business activities, keeping tasks in-house is likely to be better suited to you.

What level of flexibility do you need?

Outsourcing has the great benefit of being able to scale your resourcing up and down in line with the demand for your services. And as we referenced earlier, this can be done fairly quickly too.

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Why outsourcing is better than in-house

Outsourcing can sometimes be considered better than in-house due to the flexibility it offers. You can scale up your resourcing quickly using a network of skilled professionals to complete tasks for you without a long-term commitment.

What is an example of in-house vs outsourcing?

An example of an in-house activity is something that is done by employees within your business. For example, you may choose to manage your social media platforms yourself – this would be classed as keeping it ‘in-house’. If you instructed a bookkeeper who works independently of your business, this would be an outsourced task.

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