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When to Hire Talent vs. Contractors

By: Robert Wallace

As you look to build your product and launch into market there are a lot of things that need to be accomplished. From UI/UX design and every decision that goes into product development to go-to-market strategies and everything that goes into digital marketing campaigns it’s important to weigh the cost and benefits of doing it yourself, hiring a full-time resource or outsourcing the task to a contractor. Having gone through this analysis many times with my own companies and others with which I have worked, I thought it would be beneficial to provide the framework I use when making this decision for any given function, I am contemplating.

Is the role I need to be filled a business critical role?

Yes – as a founder, I want to make sure I am building capabilities and systems within my startup that can scale. This doesn’t necessarily mean that the capability isn’t fulfilled by a contractor, you just want to make sure that the contractor is working within a system that your business relies on, and that your business doesn’t rely on the contractor.

No – Evaluate if it is truly necessary? If it is, then build a system and find a contractor to work within that system.

Is this a long-term or short-term need?

Long-term – determine if this need is fulfilling a highly visible customer facing need or a back-office function that supports the business. If it is the former then look to hire.

Short-term – look to fill the need with a contractor or consultant and work to bring the expertise or value in house with one of your full-time employees.

How I evaluate contractors.

When going out to find freelancers, my weapon of choice is Elance. But there are other solid online resources like oDesk, and there are plenty of vendors you can find through your personal network. At the end of the day, the evaluation is based on Speed, Quality, and Price. It is unlikely you’ll get all three, if you can get two you’re ahead of the game. So you need to weigh what you need given your situation. How to evaluate those three things, try some of the following criteria:

  • Overall rating – most freelance websites have a rating system
  • Number of jobs completed
  • Rate – I rarely choose the least expensive option, unless the least expensive option is also the best.
  • Time put into the proposal – when you post a requisition for a contractor they should provide a proposal. It is very easy to tell if the response is a canned response from the contractor or if it is a custom proposal. Proposals from especially qualified contractors should mention items you may have forgotten to include yourself.
  • Responsiveness of contractor during the vetting process – this is huge, if the contractor doesn’t respond during the evaluation process you can bet they’ll be hard to get a hold of during the engagement.

As a rule of thumb when deciding to bring on contractors vs hiring a full-time employee, full-time employees should be used as quality control for contractors in their respective areas of expertise.

Written by Robert Wallace

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