Outsourcing or Freelancing: how they differ and what is right for your business
Many interior design business owners struggle to find a cost-effective alternative to hiring an additional in-house designer.
It may happen that your team sometimes feels totally overwhelmed with the amount of work but, most of the time, it financially doesn’t make sense for you to hire a full time designer. My guess is that you’ve heard the terms “outsourcing” and “freelancing” before.
You probably don’t know that about me but, just before starting my outsourcing business, I worked as a freelancer for a year and a half. This was right after I took the decision to quit my job as a middle-weight designer in London. The interior design studio I was working for offered me a full-time freelance job for 6 months, which was fantastic because I was making way more than when I was working in their office.
As a former freelancer and now lead designer and founder of an outsourcing company, it’s fair to say that I know the differences between the two pretty well. And I want to share all this knowledge with you so that you can make an informed decision about which one is right for your business.
What we will cover today:
Outsourcing vs Freelancing: what they mean
5 main differences between the outsourcing and freelancing
How to choose what is right for YOUR business
Ready? Ok, let’s go!
OUTSOURCING, FREELANCING: What do these terms mean?
If you are an interior design business owner, you probably have already done the maths, and at this point, you know that hiring another full-time designer to join your team isn’t going to cut it.
I read on IFP’s website that “it costs on average $3400 to hire a new employee. When you add in the costs of training, their salary and the additional costs of the employee benefits that a business needs to provide, the costs soon mount up. For these reasons, it may be that the smart choice for forward thinking businesses is to stop hiring, and to start outsourcing.”
Hiring a third-party to take over some of your work may indeed be the smart choice if you are looking to cut costs and get more done.
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OUTSOURCING is when you hire a company outside your organization to complete tasks/ projects for you. You hire this company when you need work done and save on overhead costs. There are different types of outsourcing companies and their business model may vary but the principle remains the same.
FREELANCING, on the other hand, is when you hire an independent individual to do work for you, whether paid hourly or on a project basis.
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So, to summarize: when you “outsource”, you generally deal with a company while you would deal with an individual when looking for a “freelancer”. Both of them though have the end goal of providing a service to a client (client is you).
When I was freelancing for this London-based studio, I was located in Brazil. I adjusted my hours so it worked with the time difference, mostly because this company was paying me ‘per day’ and were keen to have me available at the same time as them.
I was working from 8am to 4pm, give or take, and always started my day with a phone call from the team associate. In under 10 minutes, he’d quickly brief me on the top priorities for the day and I had access to their online project database so I didn’t have to ask someone to send me files. Everything was always readily available and it made the process super smooth.
WHY YOU SHOULD CONSIDER REMOTE DESIGNERS IF YOU WANT TO SAVE MONEY
This studio was totally fine with designers working remotely for the following reasons:
01 They did not want to upgrade to a bigger office because the costs would, of course, be higher. They were extremely busy and having remote designers prevented them from having to look for a bigger space
02 They did not have to pay for additional software license, computers, IT maintenance. I worked remotely and it was my responsibility to get my own licenses, laptop, etc.
03 If the workload decreases, they can reduce your hours/ stop working with you with no advance notice.
04 They could take on MORE projects and still have absolutely no overhead costs!
Whether you decide to outsource to a company or to a freelancer, you can expect to save a LOT on the overhead costs you get with your in-house team. Once you have a strong team that can get most of the work done and go to site/ client meetings, invest in remote designers to get the most time-intensive tasks out of the way. You’ll reap the benefits pretty fast!
01 | SKILLS
When I started freelancing on my own, the one thing that frustrated me the most is that I felt like my skills were limiting the number of projects I could take on. While I was working in an office, I was totally fine because we all had different skills but, let’s be real here. Each one of the offices I worked for used a different drafting programme; AutoCAD, Micro-station, Vectorworks, Revit… How are you supposed to master them all?
Then, there’s who can do 3D render and who cannot; I was part of the latter.
The companies I worked at always hired third-parties for 3D renderings when we needed them. I was great at Photoshop, knew Sketchup a little but that’s about it.
Fast forward to working by myself. Clients were asking for specific programmes or for 3D and I knew that it was too limiting. That’s when it hit me. I wanted to get a TEAM of experts to work together to provide the best work possible to the clients and also take on MORE projects.
An outsourcing company will have hand-picked the best designers, without the constraints of location, to provide the best service to you. So you get access to a bigger pool of talents, experts in their field, who can work for you when their skills are relevant to YOUR project.
As with a freelancer, you have ONE contact person to brief (in KVM’s case, it is me!) but you multiply the skills by 2, 3, 10....
Not only that but where one freelancer can be good at 2 or 3 programmes and average in a couple more… with an outsourcing company you get experts for every project.
An outsourcing company always checks quality and ensures that the assigned designers are on track and that they deliver top-notch work.
[ TAKE-AWAY: Get access to a bigger pool of experts when outsourcing to a company vs to a freelancer who will only master a handful of programmes. You still communicate with ONE person only but multiply the skills considerably. ]
02 | AVAILABILITY
Another thing that you need to consider when wanting to outsource, whether that’s to an individual or a company, is to understand how much help you’ll most likely need.
Will you need help on a regular basis? Is it going to be more or less always for the same type of tasks? Can you afford your freelancer not being available if you have a tight deadline?
Before taking your work elsewhere, it is important that you take the time to analyse everything from your workload, how much you can afford to outsource, what can be outsourced, etc.
Logically, a company that employs quite a few designers will be able to accommodate last minute deadlines better because it will have more than one individual ready to complete a task for you. Freelancers may not be available when you have a short deadline because they are working with someone else.
Last year, KVM worked closely with an Australian interior designer and, although we had over 12+ hours time difference, we made it work and it was highly beneficial for him.
He had been working alone for a couple years, after closing down his studio, but he was getting more projects. We obviously worked well together because we could communicate easily and we used his file templates to match his drawing style.
There is one thing though that made him come back.
He loved that we could work while he was asleep! He’d go about his day, meet clients and contractors, come home at night and brief me then. We’d get the work done while he was sleeping and, the next morning, it’d be ready to be sent to the client.
He felt like his company was working round the clock (which it was!), he was spending little money and had no overhead costs he’d have with an office or a team. Bingo!
When you work with a company, they effectively always have designers available to tackle your work when you need them to.
A freelancer may not only be unavailable when you need him but he also can only get so much done in a day. Imagine getting multiple designers available for you for the price of one?! Wouldn’t it be worth it?
[ Take-away: A company will be able to accommodate last-minute needs and more than one designer on a task if required while a freelancer may already be working on another project and may not be available to help you. ]
03 | LONG-LASTING COLLABORATION
It blows me away that the internet has brought us the possibility of working with people located everywhere around the world. We are no longer limited to the people living in the same city to find talented designers; we can now work with experts from different countries.
If you aren’t taking advantage of this, you are missing out!
Anyway, it is even better thinking that you can get what you need done without employing this individual/ company full-time. You can get them on board when you need help and not pay them when they are not doing anything.
Imagine if you had started doing this before COVID-19 hit us…
We have a whole lot of different clients. Some take advantage of our monthly package because they have regular needs while others call us once every few weeks to get some drafting or rendering done.
Whichever it is, over time, and because your only person of contact is me, we get to know each other and I am able to understand what you expect from us. We keep your file templates in our database so that it is easy for us to access every time we’ve got a new project with you and it keeps the process as seamless as possible. Whether you need us on a regular basis or once in a while, we’re always thought of as an extension of your team.
[ TAKE-AWAY: It does not matter that this third-party company or freelancer isn’t a full-time employee of yours. Once you start giving them work, and with a little time and practice, you will start trusting each other, communicate better and create a long-lasting work partnership.]
04 | RELIABILITY AND EXPERTISE
Let’s say that the tasks you need to get done vary; 3D rendering, drafting, photoshop editing… You may need designers with different skills.
If you go down the freelance route, you will waste quite some time interviewing multiple people, without really knowing if you can trust them to do the work on time and to your company’s standards.
I’m talking from experience here. When I started looking for someone to help me with marketing and social media, I spent a lot of time interviewing freelancers. I eventually hired a freelancer who let me down after just three days, for personal reasons. First fail.
Second one was totally unresponsive. If there is one thing that I do not accept when working remotely is the lack of communication.
Working with a freelancer, to me, is a hit-or-miss situation. You can find great freelancers who are responsive and charge you a low price but, once you need someone with a different expertise, you have to repeat the whole process of interviewing through to hiring and, as we have seen previously, he or she may not always be available to work with you.
After two or three big fails, I decided to hire a New York-based marketing company to do it all for me. It wasn’t even just helping me, I was so fed up that I hired a company to do it ALL for me so i didn’t have to worry about a thing.
This was the best decision I made and, although it cost me relatively more, the work was SPOTLESS. I have temporarily stopped paying them and still get a lot of free value from them; the service is totally different!
[ TAKE-AWAY: Going the cheaper route isn’t necessarily the best option. If you want a spotless service, assess the company’s credentials and the amount of value they are bringing to the table.]
05 | SOFTWARE LICENCES
When I was freelancing, I got pirated versions of all the softwares I needed, no way I was going to spend thousands of dollars on software licences I couldn’t afford! If you own licences for softwares you use in the office, you know all too well how expensive they are.
However, when I started my company, I knew I had to step up my game. The designers working on my team have paid-for licences and it is non-negotiable.
The files we work on have to be compatible with the ones you use in the office so that you can work on the files again at a later stage. Vectorworks, for example, made it impossible for someone working on an unofficial version to collaborate with a design studio; what happens is that the studio, which I assume would be working on a paid version, wouldn't be able to open the file done on an unofficial version. It does feel a little like the people who did buy their licence are being punished because they cannot get their work but it also prevents them to work with someone who hasn't bought one.
[ TAKE-AWAY: A company will take full responsibility for this type of situation and would usually have systems checked over and over again so there is no surprise on that end.]
CONCLUSION
When you work with a company, there is a level of reliability and controlled quality systems that you may not get when working with a freelancer.
While working with a freelancer is often cheaper than outsourcing to a company, the benefits and accessibility will differ. Depending on your company’s needs, one or the other may be better. Analyze, assess and decide what will provide you with a better outcome in the long run for YOUR business. As long as you can save time, money and are able to scale your business…it's a win win situation!