When and Why Startups Should Outsource Talent
Here’s how to make outsourced hires work for your company, at each stage of its growth
The way companies get stuff done is changing, and for startups especially, the rate of change is accelerating. Call it lean, call it agile, call it low code — all types of businesses are starting to do more with less.
And they’re doing it by outsourcing everything from sales to human resources to leadership.
Startups are usually forced to rely on outsourcing to manage functional areas of the company when the complexity of those functions outgrows their expertise. I always say that every founder should be able to run every part of their company — the tech, the finance, the sales, the support, all of it — up to a certain point. But once the founder’s vision for that part of the company has been established, the founder’s time spent on these areas becomes a liability.
So what happens when the functions of a role become too much for the founder to take on, but not quite enough to hire a full-time employee?
A common mistake is to hire cheap: Bring aboard a recent graduate, maybe an intern, maybe someone looking for a career change, and pay them less than market rate to offset their lack of experience. This is usually a recipe for disaster, because there’s no law that says a startup doesn’t have to be as good as an established company at things like software development, accounting, or customer service.
A better solution is to create “fractionalized” roles and fill them with outsourced talent — experts who can handle the most complex functions of the role and have available free cycles to work on a part time or contractual basis.
Here’s how to make those outsourced hires work for your company, no matter what stage your company is in.
Early Stage: How Early Is Too Early for Outsourcing?
A common mistake early-stage founders make is hiring too many leaders and not enough workers. This usually leads to a fully staffed executive team with lots of vision and no execution.
Why does this happen?