Hiring Freelancers vs. Outsourcing to a Company

Many readers think freelancing is similar to outsourcing. Yet both the words are very different in usage. When a person is freelancing, he is not part of any company. They might be a single person or a group of individuals; whereas outsourcing requires multiple employees working in a company hired by a third party.

In a way it can be said that freelancing is a part of outsourcing. The major difference between the two is based on the type of work they do. Freelancers usually perform tasks that are simple and can be done by one person. However, outsourcing is of more than one type, and all of the different types involve doing complex task. Freelancers usually work for a short time but outsourcing firms are under contract for a longer time. While freelancing, individuals are usually asked to do work which can be done without further research whereas outsourcing requires additional learning and research.

Outsourcing can be done in two ways. An organization can either use near shore outsourcing method or offshore outsourcing. Near shore outsourcing is when the organization uses the services of firm which is located close in terms of geographical location whereas, offshore outsourcing is using the services of firm situated overseas.

While freelancing provides easier communication methods, outsourcing can be used to significantly reduce the overall costs. However, it is based on the skilful use of outsourcing. Both the methods, if not used in the right way, can cause serious problem to the respective firm. The damages associated with outsourcing are far more than those which could arise due to poor freelancing usage. Therefore, it is important to differentiate both the methods on the basis of when and where to use them. Freelancing is a good choice when the work is tedious and can be completed by a single individual. Such a work is usually home based and does not require primary research. But in situations where entire operational units need to be built or a lot of primary research is required, outsourcing is the appropriate way.

Another differentiating point is the cost associated with the both the methods. Freelancing is a relatively cheaper option, as compared to outsourcing and can be used when the organization feel like reducing cost in the short run. However, if the organization wants to reduce their overhead costs in the long run, outsourcing, either by near shore and off shore, is the best solution. The key however, is to find the ideal software development partner.

Today as globalization increases, organizations are fast adopting outsourcing to achieve economies of scale. Through the use of economies of scale, the firm can then allow its customers low prices. Therefore, all of this adds to up to increased customer satisfaction and brand loyalty. However, this does not mean that freelancing is not a good option. For organizations looking for creativity and innovative thinking, freelancing is a good choice. Since freelancers are able to give their entire attention to the work they are doing as it allows them to produce quality content.

It would not be wrong to say that both the methods are useful, but it depends on the way they are used. For a firm looking to reduce operational costs, freelancing is not an appropriate solution. Yet for a firm who is looking for fresh and creative content, outsourcing would be an inappropriate choice. They would get the job done, but at very high price as compared to freelancing. So for any firm deciding between whether to use freelancing or outsourcing, they must look at the work at hand and make a judgement call as to which method to be adopted.

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