Article: Why startups prefer freelancers over in-house employees

Life @ Work

Why startups prefer freelancers over in-house employees

Here’s why startups prefer outsourcing work to freelancers rather than hiring in-house employees.
Why startups prefer freelancers over in-house employees

In recent years, India has witnessed a visible growth in the startup ecosystem and our country is the second-largest startup ecosystem in the world today. This growth and success of the Indian startup ecosystem owes to the cost effectiveness of outsourcing the freelance skills available in the market. Most startups find outsourcing work a better option than hiring permanent employees. Let us discuss some of the biggest benefits that startups accrue when hiring freelancers: 

Hiring freelancers is more cost-effective than full-time resources

Cost reduction is the primary motive of any new startup in the market and outsourcing helps startups optimize their resources. In-house hiring not only makes the startups liable to pay employees a set amount every month, irrespective of the fact whether the work is done or not, but also makes then responsible for sharing all the additional benefits of a full-time employee like medical benefits, etc. Many times, when the salary has been negotiated and the employment terms agreed upon, employees might get complacent and not deliver as expected; this is usually not the case with freelancers as their remuneration depends on their deliverables and performance. 

Higher RoI

When startups opt for outsourcing, they end up enjoying higher returns, that go beyond remuneration and benefits optimization. The costs related to hiring and training are also reduced, which means that each gig workers provides a higher RoI than full-time employees. What’s more, the lack of a lengthy hiring process also means that talent can be found in lesser time and through references. 

Expertise professionals in targeted discipline

Freelancers are generally expert professionals in their domain; be it web designing, content writers, video developers, digital marketing, chartered accountants, web development, etc. They have more extensive exposure to the fact that they work with varied and multiple clientele, which means they are proficient in their specific skills. Hence, a startup can get its work done with higher efficiency owing to the specialized expertise of the freelancers. Moreover, professionals being motivated towards getting more projects end up adhering to deadlines.

Ease of employment handling

In the event that an organization is not satisfied with the results of the freelancer or they are not performing as required, the startup can stop working with them with immediate effect. Likewise, organizations hire freelancers when they need them and therefore, pay only what they need for the specific time, depending on your project requirements. However, with full-time employees, the termination process is often lengthy and resource-intensive. On the other hand, if an employee leaves the organization voluntarily, replace them also incurs a cost. 

Better time management 

Many tasks can be carried out remotely and with a limited need to directly interact with the employee completing the task. Hence, specific functions that do not require in-house focus are easily outsourced by freelancers. Therefore, the startups end up focusing on other core competencies that need more attention for business to be carried out effectively. In simple words, startups manage their time by focusing on the core functions of their business and outsourcing tasks that are lower in priority. 

Startups outsource their repeat mundane tasks to put their time, focus, and energy on their core business. This maximizes the output from the cost incurred and helps them reach profitability faster as well. As we understand, startups initially need to maximize the benefits, save money, and make more profits to expand, and outsourcing recurring tasks to freelancers helps them do exactly that. 


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Topics: Life @ Work, #GuestArticle

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