What is Insourcing and How Can Staffing Agencies Help?
Ever since the 1990s outsourcing boom started to wane in the new millennium, many companies have started to realize that the purported benefits of sending key services like IT and UI/UX design – cost savings, to name one – didn’t last or never came to fruition at all. As a result, they had to find a way to complete the work of these critical departments another way.
The answer, contrary to all the wisdom of late 20th-century business logic, was to bring all that work back in-house where the company could have more direct control. This process, called insourcing, proved to deliver where outsourcing had failed, and creative staffing agencies have been able to streamline everything smoothly and effectively.
What is a Staffing Agency?
The traditional role of a staffing agency is to link companies with professionals who can fulfill a given job. Candidates generally apply and then they’re vetted according to the staffing agency’s standards. Much of what the agency does is based on reputation and performance history with past placements.
Having a dedicated team of professionals who know not only your company but the wider creative industry searching for the talent that makes up your workforce adds a strategic edge at the same time as it saves the headache of reviewing tons of applicants and perhaps erases the need for hiring managers altogether. It’s usually as easy as contacting a creative staffing agency and explaining the open position(s). Many will even construct a profile for the company to make hiring even faster for future positions.
How Does Outsourcing Work?
Companies frequently contract with outside entities, such as an outsource staffing agency, to have certain duties done. These duties are often essential to the business of the company but their importance is also frequently overlooked. There are many reasons to outsource, although the most popular benefit is reduced spending. These savings can come from offshoring to countries with lower labor costs or from saved salaries since hiring managers and interviewers are no longer needed.
One other benefit of outsourcing is the ability to pay for things only when they are needed. Rather than paying full-time wages for a position that’s only needed from time to time, companies can pay for as much work as they require. The added budget flexibility will almost always translate into savings which will be very handy to have in the event of an operations emergency.
The majority of companies don’t outsource their core business operation. Peripheral services like IT and art or design departments are frequently outsourced because they are not part of the central idea of the company. For example, a chain of restaurants will likely concentrate its operations and development on new menu items and may outsource its IT or art department. Such a company is probably only interested in IT and design departments as far as they are viewed as being necessary for the overall operations.
Disadvantages of Outsourcing
In addition to the most common complaints that it robs the local area of jobs, especially in the case of offshoring, outsourcing also can also create a fundamentally adversarial relationship between the two parties that have contracted work together.
Think of outsourcing in its most basic setup: one company (or even a government) contracts with another to provide certain services. Both are self-interested entities with profit as their main goal. Ideally, this relationship is mutually beneficial and both parties can walk away with some extra earnings. However, the truth of the matter is that an additional cost to the original business is additional money for the contracted service provider, while less money spent on the contracted service provider means more money for the original business.
The structure of this traditional outsourcing model can cause a variety of problems, such as:
- Less Control Over Output: Although the outsourced services might be peripheral, they will still be one face the company puts out toward the wider public. If it’s IT, it could be in the form of a hotline for returns, complaints, or questions. If that call is routed outside the company and it’s evident to the customer, it may appear that the company itself is unreachable, which is just frustrating at best and suspect at worst.
- Security Risks: Outsourcing usually involves giving an outside company access to all or part of the original company’s internal information. This could mean payroll or it could mean client information. Whatever it is, there is always an added risk in letting anyone outside the company see proprietary and confidential information. Often the cost of added digital security and security support personal to protect against a breach from the outside vendor can outweigh the cost savings benefit of outsourcing in the first place.
- Communication Issues: The internet has made it easy to reach anybody who wants to be reached, but there are still difficulties created by outsourcing to vendors located long distances away. In the event of a force majeur, having physical distance between different aspects of the total business can be a huge disadvantage. In the course of business under normal circumstances, having to follow a chain of personnel can result in lost time or a muddling of intentions and expectations.
What is Insourcing?
As is evident from its name, insourcing is essentially the reversal of the outsourcing process. Whatever services had been contracted out to another vendor are brought back in-house. That may mean already-existing staff can begin completing the tasks or it may mean that new staff is hired directly by the original company to get the work done.
There is no shortage of ways to use in-house talent to complete a variety of tasks essential to the business, including regional insourcing, in which a satellite location is established for specific aspects of the business to be completed, which allows the company to take advantage of certain regional benefits.
Insourcing vs Outsourcing
Insourcing is not an exact direct reversal of outsourcing in such a way that it’s simple to imagine what it looks like in every scenario. The most helpful way to compare the two is to look at some of the results and anticipate the results of certain tactics.
At first, outsourcing seems like it’s always going to be the cheapest option. But given the changing wage level in places where services might be outsourced to, especially when offshoring tasks like IT, can erase those possible savings. As earlier mentioned, there can also be additional hidden costs to outsourcing like the necessity of an oversight person or team, additional security and monitoring, or the lost time spent rectifying communication issues.
Insourcing allows for a much more realistic and direct estimate of expenses to be made. Since everything is done directly by the company, there will be less chance that critical tasks will get lost in translation or important information will accidentally be made available to unauthorized parties.
That being said, outsourcing does get rid of common expenses like taking on temporary hires for special projects, recruiting costs, software licenses, buying or renting larger workspaces, and paying for employee benefits and salaries.
Engaging the creatives that already make up the workforce in such a way that they can see they are part of a complete process will lead to higher spirits and greater dedication on their part. No one wants to feel like they are just a random component in an infinite process, and that goes double for creatives.
Rather than have the people who design interfaces and provide IT support stuck in some remote place or perhaps across the world from the staff that needs that IT support and has the most riding on successful design, having everyone in-house will create more of a team environment and a more pleasant workplace overall.
Communication, Productivity, & Safety
Just as it will help make the workplace nicer for the people inside it, insourcing also helps make communication much easier. No longer will people seeking to complete their work duties have to make long-distance calls to someone whose financial interests could well be directly contrary to their own. Instead, they can use company-wide databases and IT systems to get all the information they need.
Not only will this help reduce lost time due to miscommunication, but it will also increase the overall safety of internal information. Since everyone works directly for the company, software that gives employees login credentials including personal PINs. Not only will this reduce breaches, but additional security measures can be used to, for example, track who accessed what information and when. This will help protect payroll and client contact info without having to worry about staff who don’t work directly for the company having access.
Insourcing Creative Staffing Agencies
If the advantages of insourcing appeal to you but the work of undoing complicated outsourcing agreements and finding staff that can competently complete the work requested of them seems a bit overwhelming, remember that creative staffing agencies like icreatives have been helping to link professionals with suitable companies and they have also helped outsource duties as requested.
icreatives has also been at the forefront of innovation regarding insourcing, inventing new hybrid methods of bringing talent back under the helm of the original company while holding onto some of the benefits gained by outsourcing. One such method is our Powerhouse Insourcing, which is a process that’s kind of like outsourcing your insourcing. Everything is just like it’s done in-house without the headache of taking on a hiring manager and having to review portfolios and do all the vetting yourself.
Retraining internal staff is integral to insourcing. Whether you have the staff on hand to retrain or you’ll need to take in new employees, having a creative staffing agency can save tons of time and energy which can then be redirected to completing the core business of the company, potentially allowing the company to benefit from economies of scale. If you’re not in a creative industry and need creative work done for a business in a completely unrelated field, there may not even be anyone capable of training new people to design UI/UX or client-friendly interfaces and graphics to keep business rolling.
Powerhouse Insourcing is a unique approach to the insourcing vs outsourcing debate. It’s kind of a mixture of the two, allowing companies to take some of the advantages of outsourcing alongside the advantages of insourcing. Retaining staff and getting as much quality talent as you need without having to hire trainers or develop a training program is a huge load off for managers and for the creative employees themselves, who can concentrate more on the work they specialize in.
In-House Outsourcing from icreatives gives added flexibility and more control to the original company and the people who work there. Read on for a closer look at the advantages of Powerhouse Insourcing.
- Avoid Layoffs & Terminations: When the economy retracts or positions become redundant, having to be the bearer of bad news will weigh heavily on just about anybody. One of the advantages that stems from the outsourcing aspect of PI is that the staffing agency will be the one to handle layoffs in the worst-case scenario. It’s a terrible situation for any business to be in, but there will be some relief at least that staffing won’t have to cause worry.
- Seamless Admin Work: Since insourcing means everyone is integrated as part of the company, things like payroll and vacation management can be managed under one roof. No more divides between employees and the people who manage their paychecks. Employees will also be happy to know that their information isn’t being widely spread across multiple separate entities. If they’re in a situation where they can go in-person to the person or department who handles payroll, so much the better.
- Flexible Staff Numbers: Let’s say you have a huge jump in demand numbers and need some high-quality creative talent ASAP. Or, let’s say demand slows for a seasonal lull or a bad year happens along. In either case, having icreatives’ IHOS means staff can be moved out and in very easily, so there’s no need to pay for any more staff than you need. You can also rest easy knowing trained and vetted professionals will be available in the event you have a project come up or the flow of demand increases suddenly.
- Insourcing for Creative Teams: If the creative team behind your IT or art and marketing department is something you recognize as a useful necessity but don’t have time for, insourcing with icreatives’ IHOS is a great way to get rid of the headache of sorting through countless portfolios and having to manage oversight of a team whose skill sets are well outside the wheelhouse of the rest of the company.
Knowing exactly where your staff is coming from and how they are vetted each and every time you need new personnel is a huge relief and guarantees just as much of a labor flow as you need at a given time. From the perspective of a creative professional, our IHOS method also reduces the need to explain professional achievements to people who may not understand them in context.
Do I Need an Insourcing Staffing Agency?
Businesses vary widely and have their own unique needs. The current state of the outsourcing industry and the ever-present problems with staffing a business so that it can meet the frequently-changing demands of clients and the wider market is enough to consume almost the whole workday of multiple workers. Even if you do understand the creative market and hiring marketing or IT professionals, it can be a huge weight off your shoulders to have vetting and pre-made design profiles that suit your business so that you can remain confident that you’ll have the talent you need when the moment comes.
There’s not a faster or easier way to ensure communication and the overall operation of the company goes smoothly. People can rest assured that the code of conduct and best practices are uniform for everyone they work with because everyone will be hired by the same company and go through the same training. Plus, while there are ways to take advantage of friendlier regulations in different locations, it can be a relief during an economic downturn not to have to worry about navigating your way through multiple different local legal systems.
Outsourcing is one of the most characteristic remnants of 20th-century business. That’s not to say it’s old-fashioned, but there have definitely been some negative results from outsourcing key creative labor like art and marketing departments or IT. Insourcing with icreatives is a great way to consolidate the inner workings of a business and make sure everything can be streamlined, designed, and held to the same uniform standard across the company.
There are some advantages to contracting creative work outside the business, such as improved productivity and lower costs. But insourcing also has many benefits of its own, such as morale boosts, better communication, increased security, and uniform standards.
Luckily, there’s a way to get all the various improvements offered by insourcing without giving up the benefits that were promised by the outsourcing gurus of previous decades. In-House Outsourcing from icreatives is the best way to remove the headache of hiring while maintaining the flow of labor you need to keep business moving no matter what demand or the market might do.