In-House vs Outsourcing: What’s Best for Your Business?

by Kimberly Zhang / ⠀Entrepreneurship / July 11, 2025

Your sales are rising, profits are up, and your staff are upbeat – in short, business is booming. It’s a wonderful time for all; however, in the back of your mind, you know there’s a fine line between happy, busy employees and unhappy, overworked employees. When your business reaches this point and it becomes apparent you need to hire more help, the inevitable question always arises: is an in-house hire the best option, or is outsourcing the way to go? Unfortunately, there’s no easy answer, and the final choice can be hugely dependent on your circumstances. In this article, we’ll review the benefits and drawbacks of both hiring in-house vs outsourcing to help you make an informed decision on what is best for your business.

What is in-house vs outsourcing

In-house operation refers to managing or handling a task, project, process, or any other type of work within your company, utilising company employees and resources. When completing work in-house, you’ll have full control over the employees, as well as the entire planning and execution of the project. Outsourcing, however, involves utilising outside resources to help complete a task, a project, or develop a process. Outsourced work may be completed by freelancers or agencies that specialise in particular types of work, such as creating social media content, developing new onboarding training, or those who specialise in web design in Melbourne. Outsourcing often gives a business a larger pool of talent to draw from to complete the work.

The benefits of in-house hiring

Investment in your business

The major benefit of an in-house hire over outsourcing is that it brings talent into your business that can grow and be utilised on an ongoing basis. Although training an in-house hire can initially cost more time and money, it offers a long-term investment in the form of greater capability within your team.

Control and visibility

From the first draft to the final result, an in-house operation allows your business to have complete control and visibility over the entirety of a project. This ensures it aligns with company standards and values, and there is clarity on the outcomes from all team members from the get-go.

Direct line of communication

In-house operations offer a direct line of communication with the working team, enabling quicker resolution of problems, easier removal of blockers, as well as the ability to have more face-to-face interactions and greater transparency on the project’s development.

Schedule setting

It is far easier to set working hours and a schedule to ensure availability with an in-house team. When bringing in outside help, this can get tricky, particularly if your freelancer or agency does not have set hours, or if you hire someone outside of your time zone. While asynchronous collaboration continues to grow as a concept, it does not come without its challenges.

Greater investment in the project and outcomes

You already know your internal employees share your company values, and you know they are more likely to be invested in the success of a program because it is directly linked with their future employment, so the likelihood of them being more invested in the work than an outsourced team is probably high. Although eagerness does not overcome potential skill gaps, it does lead to employees stepping out of their comfort zone or specialty to find solutions, which can still result in the work being done.

The drawbacks of in-house hiring

Skills limitation

Although employees can learn new skills, this can take time, and some may never gain the expertise required for certain types of work. The impact of this may be an increase in the length of a project from initiation to delivery. Providing the required training can also result in unexpected costs, which might be greater than the cost of outsourcing.

Employee burnout

If your employees lack the skills to manage a particular task but are still forced to complete the work, there is potential for them to experience stress and burnout. The moment it becomes overwhelming and the pressure builds, the likelihood of staff choosing to terminate their employment increases exponentially.

The benefits of outsourcing

More economical and affordable

Outsourcing allows you to access expertise across a range of fields at a comparatively reasonable cost (when taking into account the finances related to using in-house employees – including office space, employee salary and benefits, and training). You can also access top talent in the specific field of work you are after.

Scalability

For many businesses, there are both busy and quiet periods. Outsourcing is an effective way to manage these ebbs and flows and ensure you have additional hands on deck only during the times it’s needed. Scaling your workforce up or down becomes easy; it is a cost-effective way to manage cash flow and allows your business to be more agile as a whole.

Projects can be completed faster.

An agency or freelancer who knows how to operate will have refined processes and tools that allow them to execute work at a faster pace than you could generally manage in-house. This results in a quicker project turnaround, easier resolution of issues, and faster delivery of outcomes that matter, like increased sales.

The drawbacks of outsourcing

Communication limitations

Service providers will always take longer to respond than in-house hires, which can arise from working in different locations, time zones, or the outsourcer’s need to manage the rest of their clientele. This can blow out project delivery timelines and leave more room for miscommunication.

Less influence on project outcomes

The moment you outsource a project, you relinquish some control over its outcomes. With less influence on daily operations, strategic thinking, and even quality at work, you open yourself up to the risk of outcomes that do not align with the business’s vision.

Dependency on external factors

Outsourcing creates a dependency on the external team completing the work, and they can be impacted by a range of things beyond your control, like their capacity, cash flow situation, and employee turnover. Photo by Eric Prouzet and Sebastian Herrmann; Unsplash

About The Author

Kimberly Zhang

Editor in Chief of Under30CEO. I have a passion for helping educate the next generation of leaders. MBA from Graduate School of Business. Former tech startup founder. Regular speaker at entrepreneurship conferences and events.