Outsource - Don’t Employ

by Rob Spiegel

Outsourcing has a bad rap because it has been associated with jobs going overseas. Yet much outsourcing is a major improvement over employment for both the employer and the employed, and a good portion of the outsourcing now used by companies big and small is going to local contractors. Read more about the positive side of outsourcing from small business columnist Rob Spiegel.

Payments are due. Invoices need to go out. And your bookkeeper just called in sick. Now what? You don’t know the bookkeeping system – your bookkeeper kept that knowledge to himself – so you can’t go in and take care of it yourself. And you don’t know when your employee will feel well again. So you call your vendors who are expecting payment and explain that the check will go out later than usual. There’s got to be a better way.

There is. You can outsource your bookkeeping. Or your sales. Or your warehousing and shipping. If you’re using a vendor instead of an employee, chances are the work will get done even if the outsourced bookkeeper is sick. The outsourced bookkeeper can’t invoice you if the work stops, while the employee usually gets paid sickness or not.

I recently met with a new writing client. The company is a $10 billion dollar electronics distributor. I was hired to research and write a monthly email newsletter that goes out to customers and prospects. The monthly fee for the project is generous. I met with the project manager and her big boss prior to launching the newsletter. At one point the big boss asks, “Why are we using Spiegel? Why don’t we have one of our employees write this?"

The project manager gave a quick reply. “If we use an employee, that employee will get paid whether the work gets done or not. Spiegel won’t get paid if he doesn’t deliver.” The big boss shrugged his shoulders in obvious defeat. He knew.



Outsourcing has a bad rap – mostly because it has become a political football in a highly-charged political season. That’s because outsourcing has been associated with jobs going overseas. Yet much outsourcing is a major improvement over employment for both the employer and the employed, and a good portion of the outsourcing now used by companies big and small is going to local contractors. Nobody loses out on work.

The biggest single advantage of outsourcing is that you don’t end up in that awful – and only mildly disguised – parent-child relationship. No matter how well you treat employees – now matter how fair and open you are – it’s nearly impossible to avoid a relationship fraught with shared dependence rather than shared concern for getting the work done well and on time.

When you outsource the task instead of using an employee, you end the endlessly difficult employee-employer relationship. Instead you can create a positive associative relationship that is essentially a pack between two companies. You’re the customer. The independent contractor is the vendor that serves your needs. No supervision. No management. No annual performance reviews.

If the independent contract doesn’t work out, you can shop for another, just as you would shop for a better source for package delivery. You don’t have to give a reason. A simple, “We’d like to try something else after the end of May” is all that you need to say. No triple warnings. No watching every move of the problem employee in order to document infractions that can add up to a reasonable reason to fire a poorly-performing worker. You never at risk for being sued – nor is the vendor likely to take trade secrets to a competitor. There is always a risk that you could drop the vendor, so the vendor will work continually to earn and keep your business. Most employees don’t share the vendor’s desire to deliver excellent work on time.

Outsourcing works particularly well to help home-based businesses grow without actually inviting people into your house to work all day. Many home business owners give up their home location when growth necessitates help from employees. It’s difficult to bring people into your home on a daily basis. Outsourcing solves that problem – allowing the home business owner to keep overhead down to the minimum.

Outsourcing also allows you to buy just what you need. You’re buying services, not hours. Nobody sits about doing busy work. This gives both you and your vendor greater efficiency and greater dignity.

Rob Spiegel is the author of Net Strategy (Dearborn) and The Shoestring Entrepreneur’s Guide to Internet Start-ups (St. Martin's Press). You can reach Rob at robspiegel@comcast.net

 
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