Do You Really Need To Hire An External Agency?

We have all been there - your business is growing and you can no longer run it all by yourself.

Hiring employees is surely an option - but as any early stage entrepreneur will tell you, that is a terrifying responsibility to take on.

  • What if your growth is fleeting and you have to lay off employees very soon?
  • What if all your time is consumed in office politics and internal firefighting?
  • What if operational costs balloon up and you are no longer able to run your business profitably?

A quicker, and more efficient alternative is to outsource tasks to a freelance contractor or hire an agency.

There are some benefits with choosing this option.

Firstly, you can hire and fire fast. There is no two weeks notice that your contractor has to serve. Secondly, you can choose to pay a contractor on performance (and not hourly). This way, you only spend money on value-adding tasks. Employees need to be paid regardless of how good or bad they are at their job.

But most importantly, hiring an external agency or contractor gives you an option to pick one based on their strongest skills. For instance, you do not have to hire one digital marketer and entrust them with everything from SEO, to PPC and social media marketing. You can hire three different contractors who specialize in each of these different areas of digital marketing.

Not everything is hunky dory. Agencies typically cost more than an inhouse worker. Also, there are risks with outsourcing that can be mitigated with an inhouse employee.

The best way to go about this is to perform a cost-benefit analysis to see what works better for your specific situation. Here are a few factors to consider.

How Niche Is The Role?

Are you looking for a digital marketer, or an SEO manager? Better, are you looking to hire an SEO manager or a content optimization expert? Do you notice the roles getting increasingly specific?

If you are a media outlet that publishes thousands of articles a month, you may need a full-time content optimization expert to handle these tasks. However, content optimization for a regular local business is only a component of the larger digital marketing, or marketing initiatives.

Such a business may want to hire a marketer full-time who handles several tasks including content optimization.

If the role you are hiring for is highly niche, then it is a good idea to hire an employee since they work out cheaper than an agency. However, for a broader role, it is a good idea to talk to an agency.

Can You Replace A Worker With Tools?

Many times, it is possible to get work done without hiring an employee or a third party contractor. Going back to the earlier example, a lot of work done by an SEO manager can be handled with tools that perform similar SEO services - the savings from this move can run in the thousands of dollars in a year.

In several organizations, knowledge of these tools is a prerequisite to prospective workers. To put this another way, you only hire a human after you have exhausted the use of tools to handle the tasks.

This is true not just with SEO, but with every aspect of running a business. If you run a recruitment firm, then you must consider investing in recruitment software apps that can optimize the process before hiring someone to do the job.

How Critical Is The Role To Your Core Business

Every role in an organization is somehow connected to its bottomline. However, in terms of criticality, not all roles are made equal. Sure, your blog post can drive millions of pageviews and leads your way - but, would your business perish in case your content manager were not doing their job?

That is only true for some businesses while it is not the case with other businesses. The more critical a job is to the organization’s survival, the better it is for you to hire a full-time employee to do it.

Take the example of a media house that relies on ads to make money through AdSense. If you hire the wrong agency that indulges in blackhat marketing or risky ad optimization practices that don't adhere to Google's policies, you could risk getting your AdSense account banned. This threatens the very survival of your business. A full-time employee would be a better bet in such a scenario.

This does not however mean that all roles that are non-critical to the core business can be outsourced. A lot of success in business comes from motivated workers - this is exactly why organizations invest thousands of dollars each year in engaging employees and keeping their motivation levels high.

When you outsource a role to a third party agency, you are also effectively outsourcing the task of keeping the workers motivated to these agencies. This is a tricky path to tread since money is not the sole motivator always - the agency you hire may not be concerned about employee satisfaction and motivation as much as you do. This results in high attrition which impacts the continuity of your projects and brings down success.

When you have your own employees, you can invest in employee recognition tools that gamify their work, help them achieve rewards, and in general, ensure a happy and contented workforce. This brings down attrition and ensures higher success for your projects.

How Do You Go About This?

In conclusion, the decision to hire an agency or freelance contractor should not be driven by monetary concerns alone. Look at the problem and their role from a holistic perspective, and measure the pros and cons of all solutions on offer before you make the right decision for your organization.