Outsourcing vs. Hiring a Freelancer—benefits and drawbacks

Outsourcing and freelancing are the third-party services entrepreneurs use for staffing support. Some misconstrue these two services as the same, but they differ in meaning and function.?

Origin and numbers??

Outsourcing is derived from the phrase outside sourcing, which refers to the business practice of hiring a company or corporation to do specific tasks. It started during the industrial revolution and gained popularity as a business tool in the ‘80s.? ?

The global outsourcing market continues to grow to this day, with its worth climbing to $261.9 billion in 2022. Its compound annual growth rate (CAGR) from 2023 to 2030 is estimated to be 9.4%. Meanwhile, the Global IT outsourcing market is estimated to be worth $397.6 billion by 2025.??

On the other hand, freelancing originated from the words “free” and “lance,” meaning to work independently. The word freelance came about in the early 1800s in Sir Walter Scott’s novel “Ivanhoe,” where a feudal lord refers to his paid army of “free lances.”???

Today, freelancing is defined as hiring a self-employed person to do a particular job on a short-term or per-project basis. Freelancing, or the gig economy, has seen a significant increase in popularity over the years, particularly for those aged 18-22.?

A study shows that around 57 million freelanced in America in 2019, representing 35 % of the workforce. It is predicted that most of the U.S. workforce will freelance by 2027.??

Outsourcing vs. Freelancing??

Outsourcing and freelancing are third-party services that entrepreneurs hire to do a particular task. There is a slight difference between the two, as outsourcing means contracting work to a company that handles skilled workers, while freelancing is a one-person enterprise, a professional you can contact and pay directly.???

These third-party services allow businesses to find solid professionals who can deliver quality results at cost-effective rates. Outsourcing is a slightly better choice when the tasks you want to delegate range from accounting, IT services, digital marketing, human resources, and customer support.?

Most freelancers offer writing, editing, coding, social media marketing, photography, web design, and consulting services, among others.???

Aside from cost savings, choosing an outsourcing company is advantageous in terms of resources like technology and equipment because they have more means to invest in the growth and improvement of their company. They also have access to numerous skilled professionals, meaning they can offer services that suit your needs.?????

Meanwhile, other entrepreneurs prefer to hire freelancers because they are more flexible regarding work schedules and can pay them for only a specific number of hours. Entrepreneurs can communicate and specify instructions to them directly without the hassle of going through managers or middlemen as in the case of outsourcing.???

The verdict??

Choosing between these two third-party services depends on the nature of the tasks being delegated and the demands they may require. Hiring a freelancer is more viable if the jobs require minimal training and supervision. But outsourcing is the way to go if the tasks are more complicated and may require a more formal setup.??

All in all, outsourcing and freelancing are both helpful to businesses in providing cost-efficient, effective, and quality services. Entrepreneurs only need to make an informed choice and find an outsourcing company or freelancer they can trust with their business needs.?