A growing practice may hit a breaking point if the demand for services outweighs the amount of work a team can deliver. Unfortunately, the hiring process may not be fast enough to fill the employment gap. Should another firm be outsourced to complete the work, or should the company delay work and hire full-time employees in-house? This article will introduce White Label consulting and provide you with advice on deciding between outsourcing and hiring.
White Label – The Third Option You May Not Know About
While we offer White Label consulting at Dynamic Consultants Group, my initial intention was not to write a piece about why a growing organization should use White Label services. However, my understanding of our role has been transformed. As I built this list of pros and cons and reviewed what others had to say about the overall difficulties, I believe having access to a reliable white label company in your pocket is an excellent middle ground solution.
White Label consulting is the practice of having an outside consulting firm, such as Dynamic Consultants Group, step in and consult on your behalf when you don’t have consultants in a particular vertical or software.
Quality white label work should fit seamlessly into a culture. The organization’s clients should see no difference between those contract employees and their own full-time employees. This not only requires consultants to possess technical skills, but also soft skills.
By looking for white label work, the company can own the image and delivery of skills, while benefiting from the flexibility of a contract relationship. A white label company should help build out practice processes, bring expertise around business organization, and work as a partner to grow the organization. They should be dedicated to the success of the partner organization to the point where they are no longer needed.
Continue to read and see what a fine line there is to walk when making decisions about outsourcing versus in-house hiring.
Questions to Consider
While there is no silver bullet for this decision, the following questions may help by focusing on three key factors: cost, expertise, and flexibility. Read about the pros and cons of outsourcing.
Cost
1. Can you afford the project to be delayed?
Outsourcing can decrease time to delivery as you increase the resource pool available and level of expertise.
2. Can you afford the cost of skilled labor?
Highly specialized skills are a benefit of outsourcing, but they come at a price.
Expertise
1. Is the skill attainable with current workforce?
Perhaps you don’t have the senior resources in-house that can deliver, but your team can receive a boot camp training course which could close the gap within weeks rather than months.
2. Is that skill needed long term?
It may be possible to hire, but full-time employees with these skills come at a price as well.
3. Is the skill critical to the strategic goals of the organization?
Hired employees are better suited for strategic skill sets as they will contribute to the mission and life of an organization over time. Outsourcing means that skill leaves when the contract is over.
4. Is the task repetitive or non-essential to the business?
Low-level tasks are perfect for outsourcing.
Flexibility
1. Is the delivery timeline short with little room for delay? (Aren’t all projects like this?)
While outsourcing will increase resources, keep in mind this will not always decrease delivery time. Since your organizations primary focus is on your client, it is important to consider that outsourced workers may have competing interests, multiple clients, or work in different time zones. However, an outsourced resource working overnight can have a great impact on the ability to deliver quickly.
2. Do the requirements change frequently?
If work demands can change rapidly for the work you are looking to outsource, it may be best that person is in the office every day. Outsourcing supports rapid delivery which motivates contractors to deliver a project in a timely fashion. Companies that support outsourcing can deal with a high pace environment and possess experience managing the changing demands from a client. This experience allows contractors to hit the ground running while managing your expectations. Look at some tips for outsourcing.
3. Does the organization culture lack flexibility?
Bringing in external resources can cause disruption in a business culture. Some resources may not be familiar with a typical office setting or may feel out of the loop since they are temporary, and the rest of the team is permanent. Culture diversities can possibly cause communication issues as well.
These questions can help make the decision clearer for companies, but it is still a topic that changes on a case by case basis. Each time this comes up within an organization they will have to take cost, expertise, and flexibility into consideration again. It may be best to prioritize each category before determining a path forward. For example, expertise may be top priority because the skill is critical to the overall organizational strategic plans. Therefore, the decision would already lean towards hiring in-house.
Pros and Cons
The decision for which type of employee to hire can be tough and both sides make a strong case. The organization must choose what is right for now while balancing what is right in the long term. For more clarity, here is a breakdown of some pros and cons for both:
In-House Pros
In-house supports the ongoing growth of an organization and improves the culture within a company.
- More control over full-time employees.
- Time sensitivity is handled better by motivated internal employees.
- Contractors split time with other clients.
- The organization can establish a strong cultural fit, ensuring their own best practices are followed during delivery.
- Employees are committed to the company’s long-term success.
- Increased engagement from face-to-face conversations can increase productivity and creativity.
- Highly compensated employees benefit the company in the long term.
- The organization sets the priorities for the employees.
- This gives them control over driving employees to follow what was set as priorities.
- In contrast, contractors have other clients that compete for their time.
In-House Cons
In-house forces more budgeting and planning within an organization which may not be ready to add the resource infrastructure needed to support new hires.
- Salary
- Employees are a fixed cost with long term commitments.
- “Businesses can manage their expenses in close to real time with contractors and freelancers to adjust to demand in a way they can’t with full-time employees.” Citation
- Turnover
- Employee onboarding is costly.
- The hiring process from start to finish has a price to the organization which may not be quantified, but there is an impact.
- Training
- Employee retention is costly with benefits, building costs, and ongoing training.
- If a project requires a specific skill, the team members need more training to support that new skill.
- Management
- More staff leads to more overhead, which can derail a growing company.
Outsourcing Pros
Outsourcing supports rapid delivery and immediate scale while bringing an opportunity for an organization to branch out in a skill set, perhaps not yet permanent to their overall strategy.
- Highly specialized skill sets available from contractors who have made a career out of a specific need.
- Contractors bring diverse expertise across an industry.
- This can give valuable insight to compare internal business processes with others in the same industry.
- The lengthy talent acquisition process can be shorter. Thanks to the outsourcing firms having their own internal resource management.
- Short term projects can see a cost savings by hiring only the resources needed just in time for the resources to be used.
- The goal is to avoid bench time with contractors.
- In outsourcing you are renting skills for a period, which actual physical resource is assigned is not managed by you.
- One-time tasks are a prime example of using contractors for short lived contracts.
Outsourcing Cons
Outsourcing exposes a strong risk to the culture of a budding organization while exposing the short–term budget to risk as well.
- Contractors have competing interests for their time.
- It is up to the company to manage those contractors to ensure timely delivery.
- As stated before, there is no guarantee the contractor will be a cultural fit in the organization.
- There may be resources that are detrimental to a project because of the lack in cultural fit to your organization.
- The organization must manage these relationships with an internal resource like a project or program manager.
- Bad parties can sell a set of skills that they are not fit to complete.
- PRO tip: Always demand references.
- Communication issues can be exasperated by the differences in methods or practices coming along with the contractors.
- You may experience delays in response from those working different time zones.
- A key skill for consulting is solving problems in a creative fashion. Keep in mind, creative talent can work alternative schedules and/or struggle with timelines.
- Highly skilled labor can be exceptionally expensive.
- The skills are not retained because when the project is over that expertise is lost to the company when the contractors leave.
- If the skill is essential to the business’s strategic goals, you should hire.
Closing Thoughts
Remember the comment about a practice at a critical juncture in their growth? What advice would you give them now? If they do not have the capital to hire a full-time employee and they cannot afford to lose work, they should outsource. On the other hand, if they can’t afford costly contractors who may or may not fit their cultural brand of delivery, they should hire in-house.
Unfortunately, we at Dynamic Consultants Group do not see this scenario as black and white. There is a lot of grey area in these decisions. We find most partners see these skills as critical to their organizational strategy but still do not have the pipeline to support hiring. Partners in this position benefit from the third option, White Label consulting, until the pipeline can support a full-time employee. As for the necessary skill set, we at Dynamic Consultants Group offer training for internal resources, ensuring the skill stays with the organization after the contract ends.
After years of Microsoft Partner White Label consulting we believe in three pertinent ideas:
- A growing organization does not need to sell their soul to big firms just to have manpower to deliver.
- A growing organization MUST remain true to what they believe sets them apart in the industry.
- Organizations that leverage our expertise in Microsoft Partner consulting retain control over the delivery methodology that is part of their organizational strategy.
We would love to hear from you about your journey growing an organization. We look forward to meeting many of you along the way.
