Anastasiya Golovatenko is a director at Sherpa Communications

As we advise numerous startups on scaling strategies during our mentorship sessions with incubators, a recurring question arises: what is the optimal strategy for team-building? As one of the most expensive startup costs is payroll, founders often wonder if they should hire in-house, outsource, or rely on freelancers, particularly in the initial phases of their venture. The answer often is not black and white. Each approach comes with its own considerations, and the decision should be tailored based on individual business needs.

Planning: the first step

Rushing into execution without adequate planning can be a pitfall. Have you outlined your business concept? Identified target markets, industries, and key decision-makers within those sectors? Equally important is deciding which services you will introduce at the outset. Do not run after “let’s target them all” idea. Go for industries where you believe your business will quickly win clients. While it is tempting to offer a plethora of services, concentrate on those that are in high demand or are trending/unique to draw interest. After a thorough analysis, you will have that “big picture”, helping you understand what kind of talent is imperative for your business growth.

Freelancers vs. In-house 

Contrary to popular belief, your initial hires should not be the ones servicing clients. Your primary concern should be your business's online visibility. Invest in digital marketing and SEO specialist as he/she will help with high website ranking in search engines as well as leads that are so important to fuel your business. When considering remote team vs. local hiring, always factor in the nature of the role. Positions like tech and digital marketing may not need local expertise and could be outsourced to save costs without compromising quality. Client servicing team, of course, should be based locally, especially those members who lead on accounts and help you retain or bring new clients. Most deals in the Middle East are secured through connections, so definitely make sure your key people are based locally. The same applies to you as CEO. Do not be that leader who manages their business from Singapore or Sri Lanka. 

Freelancers

Pros:

• Specialist expertise: freelancers often possess niche skills honed over multiple projects.

• Cost efficiency: engaging freelancers can be more cost-effective than full-time hires.

• Contract flexibility: projects can be short-term, long-term, or on a per-project basis, offering flexibility.

Cons:

• Time consuming activity: a lot of time goes into proper briefing while timeline for delivery of results can often be dictated by a freelancer. 

• Management: coordinating with multiple freelancers can be administratively heavy, and it can be very difficult to form an effective team with them. 

• Control: freelancers may become preoccupied with other projects, making it hard to ensure the prioritisation of your project unless you offer a higher rate. 

In-house roles

Pros:

• Dedicated focus: full-time employees are fully aligned with the company's mission and objectives.

• Direct communication channels: immediate feedback and seamless communication streamline processes. 

• Intellectual property control: with an in-house team, you can be less concerned about information leakage. Ownership of materials produced also resides with your brand.

• Cultural integration: corporate employees breathe the company culture, ideally ensuring greater loyalty. 

Cons:

• Cost considerations: salaries, visas, benefits, and overheads can strain budgets.

• Scalability challenge: new projects can require extensive hiring, however, upon their completion, the need for such extensive overhead may diminish, making it challenging to let people go.

• Skill-set limitations: the team's expertise is bound by its existing members unless new specialists are onboarded.

When to consider an agency

Your decisions should consistently focus on efficiency, time, and cost. Instead of investing in a team of specialists, consider an agency that provides a comprehensive suite of services. Local agencies can offer in-depth market knowledge and connections. Boutique-style teams often showcase a proactive approach and can often deliver results faster than in-house teams. Furthermore, transitioning away from an agency partnership, if required, can be more straightforward and faster than traditional employment avenues.

Agencies

Pros:

• Diverse expertise: an agency houses varied experts, offering a comprehensive solution.

• Driven by KPIs: agency work is structured on a performance-based approach, which guarantees consistent results. 

• Cost-effective: onboarding of the whole team may cost less or the same as onboarding of just one mid-level in-house manager. 

• Press-office: PR team can replace the whole marketing/PR department. 

Cons:

• Cost implications: top-tier or big in size agencies command premium prices. 

• Potential for generic solutions: choosing a less experienced PR partner might result in receiving generic solutions rather than tailored strategies. 

According to the Deloitte Global Outsourcing Survey 2022, 70 per cent of surveyed executives indicated that cost was a primary reason for outsourcing. Today, although cutting costs remains one of the top four primary drivers for engagement of outside partners, it has been influenced now by factors such as access to top level specialists with diverse skillset, shifts in business and operating models, and the need to keep pace with technology.

In the intricate dance of building a business, there is no one-size-fits-all approach. For startups, beginning with freelancers and gradually integrating in-house talent can be a balanced approach. And to manage complex tasks without overburdening your company with numerous hires, lean on agencies’ expertise and speedy service delivery. A complex approach can help keep your business lean, ensuring you remain focused on your primary roles as a leader.