| 10°C Dublin

Changing face of work means outsourcing may be the future for most


US companies hired far fewer workers than expected

US companies hired far fewer workers than expected

US companies hired far fewer workers than expected

In 2011, just 25pc of business was outsourced. That's risen to 31pc this year, and will continue to grow - up to 40pc of the global workforce will be outsourced freelance workers and consultants, according to the 2015 Hiring and Working Trends report by Expert360.

Though the outsourcing trend is definitely upward, there are certain potential pitfalls that should be taken into consideration before you decide it's right for your business.

You're giving an outside individual or company access to your business data, anything from accounts to customer mailing lists, so security and confidentiality should be written into the contract agreement you enter into.

Terms and specific responsibilities will have to be carefully thought through to ensure that there's no hidden costs cropping up mid project or contract that you hadn't thought to negotiate for. And there's the issue of quality control and company ethos - though a good freelancer will work hard to make sure they capture and deliver your company's standard, or better, it's important to look at their portfolio and previous client testimonials to ensure you're signing up with a good freelancer in the first place.

Derrick Bell, whose Wicklow-based company Toby Wagons operates primarily through outsourced labour, is frank about the downsides to freelance hiring.

"Some freelancers require you to enter a contract, so you do have a certain gamble to take to ensure you get ROI (Return On Investment), and one recent hire has been slow to deliver so it might be time to look elsewhere. Other than that I feel the positives outweigh the negatives.

"I have an external company who hold my stock and then send it directly to customers. I do not get involved with any of this. I also outsource a web developer to do work on my websites as this is technical.

"I also outsource some work like SEO and advertising. I am proficient in both, but it's good to get a specialist who can add their depth of knowledge. I also use quick outsourcing methods like (the freelancers website) Fiverr.com to help with lots of small things, and even just to review my sites regularly to see if there is any improvements I could make."

So what are some of the benefits he found?

"I might only need a couple of hours here and there on certain projects and outsourcing allows me to avail of specialist services without the need to hire anyone and pay PRSI, training, office costs. With the main part of my business outsourced I could effectively run my business from a beach, which I suppose is the dream."

The Expert360 report estimates that as much as 76pc of businesses surveyed are experiencing a skills gap. This can be dealt with very effectively by outsourcing particular projects or services without the long-term costs or hassle of a traditional hire, while on-site outsourcing will bring that expertise to your existing employees, who can work side-by-side with the freelancer to acquire a whole new skill set - if that demonstration or training is made part of your contract agreement.

Ciaran Curran is a business systems analyst who works on contract to companies such as Coillte, with his Kildare based business ILGRIN Consulting.

He faces the challenge of learning a new industry with each contract, as he moves between a lot of different industries from the government sector, semi-state and private sector - all of which have different ways of doing things and different challenges.

He notes that contracting staff are not eligible for benefits which are offered to permanent staff, like holiday pay, sick pay, health insurance, pension contributions or bonuses, while there are also significant bottom line cost savings for his clients' payroll with outsourced contracts as there is no need to calculate PAYE, PRSI, or USC.

As the cost of a contractor is fixed for a project, this enables the contractor cost be included in the overall project costing and comes out of the project budget.

Of course pros to the hiring company can be cons for the freelancer.

"As a self-employed contractor you don't have the luxury of paid holidays or sick leave so it can be very challenging to find the time to take proper holidays; excluding bank holidays I have only taken 10 days vacation in the past two years.

"In Ireland the tax system penalises people who work for themselves both with additional USC rates and no social welfare supports for when self-employed people are not working.

"Since a significant amount of work moved to contracting during the Celtic tiger years a lot of the workforce are now effectively self-employed and bear all the risk themselves, often working without any savings or health insurance."

Tina Mulhearne is the Tipperary-based owner of HR Direct, an outsourced human resource solution for micro and SME companies in Ireland. As a self-employed business owner, Tina herself outsourced specific skills she doesn't have - such as accounting and IT support - and she values the independent opinion and expert advice she has to hand as and when she needs it.

As it's estimated that a skilled professional like Tina can earn up to 275pc more as a freelancer, it makes sense to explore this option from both sides of the equation.

Common freelance services include customer services, PR and social media management, accounting, IT in both hardware and software systems or support, human resources set up or management, business data management, and copywriting on everything from white papers and reports to marketing brochures and content creation for company blogs or newsletters.

If you need it done, and you don't have the skills or time to do it internally, there's a professional freelancer waiting to do it for you.

Most Watched