Liam Martin, along with his partner Rob Rawson, has 50 employees helping him run Staff.com – an agency that remotely connects employers to full-time staff around the world. But Staff.com doesn’t have a physical office where the team works together. In fact, Ottawa-based Mr. Martin spends most of his time working in coffee shops alone.
Not only is he in the business of helping companies build remote teams, but it’s also how he runs his own company. “We have 50 employees in nine different countries,” he explains.
A slew of websites, such as Elance.com, oDesk.com, Guru.com and Staff.com, have made hiring freelancers for small businesses easier than ever. And, it seems, more employers are giving it a try.
Elance.com’s figures, for example, demonstrate the growth outsourcing is seeing: The site boasted 80,000 new employers and $43-million in contractor earnings in the first quarter of 2012. And the number of people hiring on Elance grew by 120 per cent in 2011. This growth is typical for the major players in the industry, Mr. Martin says.
The shift toward outsourcing is growing, says David Phillips, because it’s no longer a new idea. “Five years ago people knew it was an option, but now they actually know businesses that are doing it, so they’ve become more comfortable with it,” says Mr. Phillips, who owns Toronto-based Phillips Innovations, which offers website design, search engine optimization, and outsourcing services in these areas to customers across North America.
Lorri Rowlandson, who runs Rowlandson Inc., an outsourcing advisory firm in Toronto that focuses on large outsourcing arrangements in facilities management, credits the increased interest to improvements in technology.
“It’s definitely becoming more pervasive and this is enabled by technology,” she says, referring not only to the sites that connect employers to staff, but also to monitoring software they use to help employers see exactly what remote staff are working on (and how much and how often).
What’s also driving employers to outsourcing – particularly to global outsourcing – is the cost benefit, Mr. Martin says. “The employer doesn’t have to pay for payroll, offices, equipment,” he says.
He estimates the cost of hiring remotely to countries such as the Philippines and India is about 30 per cent of the cost of hiring in a major urban centre in Canada, and the cost of hiring a contractor in a rural location in Canada is about 75 per cent of the cost of hiring in a major urban centre.
Ms. Rowlandson agrees that the financial savings are attractive, but she emphasizes that hiring the right person for the job – not the cheapest option – should always be the goal. The true advantage of outsourcing is the vast talent pool it allows employers to access, she says.
Mr. Martin agrees that the cost benefit is only part of the picture. “What it really does is allow you to hire the best people on the planet,” he says.
So, how exactly does an employer find the best person for the job on sites that offer thousands of contractors offering expertise in everything from administration to IT? Typically, the sites, which usually charge a 10-per-cent fee and handle payments to the contractors on behalf of the employer, allow employers to post jobs, which contractors can apply to, and contractors to post profiles, which employers can browse. Profiles come complete with ratings from previous employers and samples of the contractor’s work. Ms. Rowlandson likens it to shopping on eBay.
Ms. Rowlandson, who globally outsources some tasks within her own business, is a fan of this style of hiring because the information at her fingertips is often much more insightful than what she’d get in a traditional résumé.
But before employers even consider going this route, all three experts stress that they must be able to clearly define the scope of work, which can be anything from a one-time, simple task to a more complicated, long-term project, as well as provide detailed documentation around relevant processes.
“Any organization that doesn’t know their processes shouldn’t touch outsourcing with a 10-foot pole,” Mr. Martin says. The result of poor communication can quickly result in loss of productivity and funds.
Mr. Phillips doesn’t deny that the upfront work of providing detailed documentation is significant. But, he says the “huge time investment” is worth it once an employer has found talent they can use time and time again. “Once you have a relationship established, it runs itself.”
Working with contractors in countries where English is not the primary language may seem like a gamble. But a few checks and balances can ensure the contractor is able to deliver what they promise – and, actually, these steps should apply to contractors regardless of location or native language.
Mr. Phillips always communicates with a candidate by e-mail by asking a simple question related to the project and ensuring they reply in good English in reasonable time. Mr. Phillips always administers a test related to the work to personally assess whether the person’s qualifications are up to his standards. And if the job is going to involve the candidate speaking on the phone to clients, Ms. Rowlandson will also conduct a Skype interview.
Managing several contractors in different countries all working on the same project can be a bit of a juggling act. Mr. Phillips suggests creating a Google document as a centralized place for freelancers to share their progress and leave questions. “It’s better than having your inboxes clogged up,” he says.
To get the most out of relationships with contractors, Mr. Phillips suggests forming personal bonds. He once visited workers in northern India during a flight stopover and he acknowledges foreign contractors’ local holidays. He also makes a point of spending up to 10 per cent of his time working with a contractor on giving them feedback to help them do their jobs better – without limiting it to the project at hand.
“If you show you care about them as people, they’ll go the extra mile for you too,” he says.
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