When to Hire, When to Outsource HR for Your Global Small Business

Congratulations, you’re running a global small business that is growing leaps and bounds. How do you decide when to hire employees and when to hire contractors? 

Positions formerly reserved for in-house employees, such as those of a web developer, a designer or a HR specialist, can often be done faster and more effectively with qualified remote contractors. If the following conditions don’t apply, it might be good to use a contract worker to fill a position:

  1. Do you need a person to do the work every day?
  2. Do you have funding to support what needs to be done every day over a long period of time?
  3. Are you willing to pay the benefits (paid vacation, sick time, training and healthcare, for example) that come with hiring a full-time employee? Payroll and social security taxes also represent a significant expense. Watch out for hidden costs that can impact a business in a negative way.
  4. Do you need the person to be physically in the office to get the work done?
  5. Do you need to control the work being done?

When to HireIf you answered “no” to all of the above questions, hiring contractors is your short-term solution. One of the single-biggest advantages for utilizing contract help is that your company is not responsible for paying benefits to the contractor. Second to that is the added flexibility of having to hire staff only when you need them. Big caution: Never treat a contractor like an employee. Misclassification of an individual as an independent contractor may have a number of costly legal consequences. Consult with your HR manager and international attorney for guidance. You don’t want to mess with the law.

Note:  Be sure to thoroughly review the key provisions in the Patient Protection and Affordable Care Act designed to ensure that Americans have access to quality, affordable health insurance. According to the Small Business Administration’s Health Care site “Depending on whether you are self-employed, an employer with fewer than 25 employees, an employer with fewer than 50 employees, or an employer with 50 or more employees, different provisions of the Affordable Care Act may apply to you.” Depending on the size of your organization, you may find out it is more advantageous to hire contractors vs. more employees.

In hiring independent contractors, set expectations right at the beginning of the project. You don’t want anyone wondering if the work they are performing is adequate or not. In addition to an initial e-mail contact, consider setting up a phone appointment to further discuss your needs. This is the best way to build trust and negotiate fair compensation. If the contractor is located in another country, consider using Skype or Google+ to keep the costs down while you communicate.

Check in periodically with the contractor to make sure the work gets done and that it meets your expectations and is performed on time and within budget. You might set up daily, weekly, or monthly check-in points to ensure things are on track. Global projects can be coordinated on the move with your digital device, with everything stored in one place through such trusted online repositories as: Google Drive, DropBox, SugarSync, Box, and SkyDrive.

While it takes a strong global leader to drive successful results for a business, true business victory cannot be obtained without good people surrounding you. After all, the basic and most important side of your enterprise is still the human side.

 

About the Author

Laural DelaneyLaurel Delaney is President of GlobeTrade.com, a management consulting and marketing solutions company dedicated to helping entrepreneurs and small businesses go global.  She is the author of a new book, “Exporting:  The Definitive Guide To Selling Abroad Profitably” (Apress 2013), serves as the About.com Import & Export Expert and manages The Global Small Business Blog.

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