The Pros and cons of working with independent freelancers when compared to a freelancing agency with 1000+ professional’s focusing on several niches, such as Netsmartz
This 17 year old company with headquarters in Rochester (New York, USA) and 8 locations around the world, enables Outsourcing to be flexible as per customer requirements, up to the “build your own team” model, where the client may choose to create it’s own temporary “corporate alike team” to address a given need that demands several technological competencies (maybe just part-time involved) and without the inherent hiring and retention costs.
Despite its dimension and due to such flexible model Netsmartz has been able to support both large companies as well as SMEs.
Having both a fixed price approach (when requirements are clearly defined) as well as a “pay per use” solution (if facing dynamic requirements), most clients start by engaging one or two resources and scaling up from there, up to 15 or more experts. One client in Canada “walked” this path and now, having enjoyed the experience but moving to the second stage of their product lifecycle, had its contract changed from a “build your own team” to a “pay per use” model towards the product enhancements and upgrade phase.
When Outsourcing, the “natural” process is to start small and grow the engagement over time
After incorporating one freelancer and assessing that it works, some clients that initially had their own internal development teams, end up moving to a “full outsourcing” scenario. Geeting the same or even better results in a more flexible way and with reduced costs.
Once you get the same results by outsourcing, you no longer want to pay extra
Having such a wide Outsourcing portfolio implies a large internal team. So, to address such a wide variety of client niches the option was to organize the company in specialized departments as if small independent expert companies.
And about working with an agency versus directly hiring freelancers?
Here Ruby points out that most of the times, freelancing is to outsource to a complete stranger and you end up: not really knowing if that is who is effectively doing the work; not having whom to escalate in case things are not working properly and not knowing if there will be someone available to support you in case of urgent need. Whereas, if working with an organization there is a degree of credibility and available responsible accountable people whom to address if needed be.
A freelancer may come cheaper, but maybe it’s not a bad idea to pay a little extra for your peace of mind
Working with agencies does imply some overhead like Project Management versus directly working with freelancers, is that a handicap?
Netsmartz “build your team” model, implies having dedicated resources under client direct management, so no middleman here. Nevertheless, in the case of not being satisfied with a given resource there is an escalation procedure in place that may lead to an appropriate replacement, so instead of constituting a problem, it is, in fact, a virtue.
Cost wise how does Netzmartz fits in face of hiring a local resource?
Hiring locally is more expensive because you need to cover the hiring process, the annual fixed cost (in line with the local market standard), plus the retention and operation costs (software, hardware, infrastructure) and if you find yourself not having worked for the resource, the layoff cost.
By means of offshoring combined with the scale synergy effect, Netzmartz will end up charging a price that (although deriving from an average blend of all the above-mentioned costs), still represents in average 50% of the overall cost a company would incur if directly hiring locally.
And what about the impact of cultural differences?
Even though if the experts are remotely based in India, therefore meaning some cultural specifics, in one hand the Project Managers are very senior elements who perform close on-site client follow-up in North America (therefore being familiar with cultural and work style aspects) and in the other hand clients are encouraged to visit their teams in India and by doing so promoting proximity and establishing bridges.
Investing in technical and language training has proven to be a successful factor in supporting establishing bridges between clients and the team
What is the nr.1 reason that still refrains companies from Outsourcing?
Just looking for the lowest cost may imply a bad experience which then acts like an anchor, holding you back from again attempting outsourcing.
Outsourcing is much more than price and one should consider: appropriate skills set; communication; flexibility and work processes when deciding.