Article

With our professional and talented staff,
we make sure all your tasks are done in the most effective way.

Freelance, Outsource and Offshore – Which Fits Your Business?

by | Apr 13, 2023

When it comes to employing someone from other countries, people take three most distinctive engagements: freelance, outsourced and offshore. Each of these engagements has unique benefits and challenges that businesses must consider when deciding which option is best for their needs.

Internet and digital technology have made working with international professionals easier than ever. For short-term assignments, firms are turning to freelance jobs or freelancers. It gives companies access to global talent and lowers full-time hiring expenditures. However, managing distant freelancers and ensuring quality and timely delivery can take time and effort.

Businesses can also outsource international talents. This entails outsourcing tasks to a third party. Customer service and accounting can benefit from it. But, outsourcing can cause communication issues and take a lot of time to manage.

This article will examine the differences between freelancing, outsourcing and offshoring in more detail. If you want to hire international talents, keep reading to learn more.

Summary

Freelancers charge hourly and often quote you the cost before conducting the work.

Outsourcing is hiring an external company to perform the work that can be done internally. For example, website development work can be done by developers inside the company, but the cost can be reduced by giving it to another company.

Offshoring is the same as outsourcing, with the only difference being no external company. The service company is created where labour cost is much less; then, the associated business process will go to the service company.

Have you got a clear explanation between freelance vs outsource vs offshore? No? Let’s break it down below!

Freelancing

Freelance - worker

This is the simplest form of moving the work from your end to another, and you are employing a person to do your job. The freelancing engagement often with an hourly rate, and depending on how much time the freelancer works for you, it will be the amount you pay at the end of the week or month.

One advantage is that this is a flexible arrangement. You only need to engage the freelancers when needed without paying any idle cost. Another one is cost; having freelancers who reside in other countries can significantly reduce the cost of getting tasks done.

However, there are some limitations that you need to be aware of when choosing freelance services. One is data security. Certain tasks are given to freelancers with sensitive data. There is a risk that the freelancer may take that data to do other things you don’t know about.

Another risk is the quality of work. Freelancers often have full-time jobs, so when the primary job demands more time, they must prioritise it over your tasks. This can lead to delays in delivery, or the quality is not up to expectations.

Outsourcing

Outsourcing is the practice of hiring a company outside your own company to perform services that are usually completed by your staff internally.

Why do people outsource? One reason is quality. There are companies whose existence is specialised in one thing and one thing alone. Their expertise in the field is more profound than your staff in most cases. Another is cost, by outsourcing to a company that has good processes to do a particular service can be more affordable than doing it yourself.

There are particular unfavourable possibilities as well. One that comes to mind is the risk of dealing with companies in different jurisdictions. If the engagement goes south, there is no guarantee that you can rectify the damage via legal action.

Offshoring

This is the ultimate solution for the problem of cost saving and quality preservation. Granted, it can be costly to set up, but once it is done, a company can enjoy the vast benefits that it brings.

Offshoring is when the parent company opens another company, often in another country, to specialise in a business process. The primary purpose of this company will be handling a single process, e.g. accounting and bookkeeping. Where the company is located will determine how much cost it can save. If the company is in a Southeast Asian country like Indonesia, Philippines or Vietnam, the parent company can save tons of money.

The disadvantage is, clearly, the set-up cost. It is not something that a small company can afford by itself. However, they can start by having contractors in said companies, building the team, and building the legal entity later.

Which One is the Best for You?

Freelance - women worker

Freelancing, Outsourcing and Offshoring are the most popular practices that companies worldwide are using right now to cut down on expenses and be more efficient. If you’re considering any of these options, evaluating your company’s situation and goals is essential to determine which engagement best fits.

As an Offshore Resource provider, we can help you navigate these options and set up your team for success. VAFE has helped many companies set up their teams in Indonesia, has provided expert advice on where to start and what to consider. We offer various services, including freelance, outsourcing and offshoring solutions, to help businesses like yours operate more efficiently and cost-effectively. Reach us right away to know what we can do for your company.

If you want to learn more about how to build your company or you want to know our journey with our clients, read our articles or case studies.

Also remember to sign up for our newsletter immediately so you don’t miss a thing!