"Should I hire the talent internally or outsource it?" Let's dive into how CFOs can support this big 'ol business dilemma.
CFOs play an important role in this decision-making process, and usually - in an almost intuitive reflex - the decision comes down to which option is the most cost-effective.
However, there are many other qualitative and quantitative aspects to consider and to discuss internally with the rest of the organization before concluding.
If you are currently facing this dilemma, here are some essential questions you may want to analyze internally with the rest of your organization's leaders:
Understanding the project
Will it be a one-off project, an ongoing one, or will it ramp up/ramp down? Do I have the knowledge required to run the project? Will it be a crucial process for revenue generation? Will it bring efficiencies (financial and/or operational) to the business? Will I have to be constantly training the talent? Can I do it myself? Do I need support?
Onshore or offshore talent
This one is tricky after COVID-19. With a huge part of the workforce working remotely, what does onshore even mean? Co-workers/teams who live just a few meters away might see each other physically once a year and still function efficiently. If you incline yourself toward an offshore option, ensure there is a cultural fit, no language barrier, and that talent is in a friendly time zone.
If you hire offshore talent directly, comply with local laws and regulations.
Depending on the market you operate in, should you hire internally and need to scale down, consider whether severance costs apply and if the layoff will hurt the company’s reputation. In an outsourced model, should you need to scale down, the exit agreed clauses are usually between one and two months with minimum to no company reputation impact.
Generally, outsourcing partners can hire the best talent faster than when companies hire themselves directly.
When hiring internally, consider whether you will be paying a recruiting fee if you are not hiring the talent yourself directly.
Do I have the time and experience to retain the skilled professionals I need? If the talent leaves, how long will it take to rehire them (internally) vs. replace them (outsource)?
Should you hire internally, make sure to consider the "set-up" cost for the newly hired talent, such as all the hardware needed for them to be able to work (laptops, peripherals, etc.) and if additional General and Administrative (G&A) effort will be required.
Do I have the know-how to recruit, retain, and guide the talent needed?
These are all high-level tips for you to consider, knowing that each of them needs a deep dive analysis that I won't get into to keep this post short.
The key takeaway is that there is NO BETTER OR WORSE model. It all depends on your particular reality and your business strategy. So, as long as you have considered every aspect of your chosen model and identified all the associated risks and opportunities that come with it, embrace your decision and make the most out of it! There will always be time to readjust if necessary.
What other aspects do you consider when choosing your model?
At Techie Talent, we specialize in near-shore outsourcing IT services and cover every angle needed to develop partnerships that work in both ways. Please feel free to contact me if you want to explore options and assess whether we would be a good fit for your business needs. We have +20 years of experience doing this, building and maintaining robust partnerships with our customers.