MY PALMS WERE SWEATING. I COULD FEEL THE LUMP IN MY THROAT TIGHTEN AS MY FINGERS CLENCHED THE CORNERS OF MY BLOUSE.
Keep it cool, Jacquelyn.
I straightened my back with the clearing of my throat and eyed his profile as he was reviewing the proposal.
They’re going to ask me, I silently cringed.
I wasn’t sure how I was going to respond if they did, despite the fact that the question had been plaguing me from the moment I set up my freelancing business in 2015.
In my mind, I couldn’t understand why a business would bother spending $__K/month on my services when – really – they could just hire someone in-house for probably less than that.
He closed the proposal with a nod, “Alright, so just to confirm this would include the copy as well? ”
After clarifying the details and agreeing to a non-compete with competitor brands, we shook hands and the deal was done.
“In my mind, I couldn’t understand why a business would bother spending $__K/month on my services when – really – they could just hire someone in house for probably less than that.”
Just like that.
If you’ve ever landed your own clients you’ll know what I mean when I say it’s one of the best rushes on this planet – a validation of all your efforts and work!
I was on cloud nine the whole rest of the day.
But – to be honest – it took me a few more years before I would fully understand why businesses would even bother hiring me when, oftentimes, the cost seems much higher than trying to hire internally.
WHY DON’T BUSINESSES JUST HIRE INTERNALLY?
The truth is there are different motives, depending on the size of the business. And there are pros and cons for both situations.
For large brands – you know, the Nike’s of the world. The reason they outsource to agencies is mostly due to something called Opex, which stands for operational expenditure.
These are basically funds used by a company to cover expenses such as wages, maintenance services, rent and utilities, and brands. Directors are given budgets around these and – while you may think your agency costs the brand a lot more – many of these brands don’t have the budget bandwidths to add more staff to payroll due to Opex and CapEx (capital expenditures) restrictions.
A reminder here – as a former employer myself – I have come to learn through the years that staff are actually very EXPENSIVE. They get sick, they take time off, they need training and go on maternity leave. A $5K/month employee will cost a company a lot more than an $8K/month freelancer – who can fulfill work year-round and around the clock. A freelancer also gets more done in that 1-month timespan than an employee can who has to commute to you, settle into the office, leave for a lunch break, get back into the groove of things, and crash at 3 pm. Studies have shown that in the 9-5 work schedule the average “great” employee only gets 3ish hours of impactful work done a day…
But surely in the long run hiring internally is a much smarter idea?
Perhaps, but let’s have a look at why smaller businesses choose to recruit freelancers vs internal staff.
Firstly – most businesses have no idea what they’re doing when it comes to anything digital marketing – let alone specific marketing activities such as video content and social media strategy. The platforms and tactics are so new and ever changing that, unless you’re on top of it all the time, you get left behind.
And the reality is that in order to manage staff, you need to have a concept of what needs to happen or how to know if they’re even doing a good job.
So for most entrepreneurs and business owners – trying to become an expert in something that would just consume a lot of their time makes no sense.
They simply don’t have the knowledge to even know how/who to hire for such a role nor do they have the time/patience to try and train/manage said individual(s) in their business.
Secondly – for most digital marketing services offered in the market – the skillset needed to complete the full picture often requires a whole range of skills. There’s a saying in the industry of “looking for a unicorn” and it’s not far off. You need a hybrid person of a graphic designer, marketer, strategist, data researcher, and creative content writer.
Take FB marketing, for instance, in order to be a good FB marketer one must be able to:
- Write copy
- Have an eye for creative
- Understand the potential of Reels and Stories
- Have an analytical mind able to interpret data
- Be a strategic and adaptive thinker
So you’re needing someone that can use both their left and right brain! Not an easy feat as most of these people are already doing their own thing!
When a startup or small business wants to grow fast and has needs for competence, tapping into an agency means they essentially get the whole package – all the skills required – in what would otherwise oftentimes require three people internally to complete.
So – plain and simple – businesses just want the headache taken off their plate and want results. And they want a solution NOW.
PROS & CONS OF HIRING AN AGENCY – WHY BOTHER?
- Fewer headaches
- Faster results
- Access to a bigger suite of skills
- “Round-the-clock” service
- Oftentimes cheaper than internal staff
- My favorite… Less B.S.
- Long term, once Opex stabilizes, wiser to hire internally
- As your business scales this can get costly
- Can’t treat like a slave (kidding, kinda…)
SO WHAT’S RIGHT FOR YOU?
Every business has different needs and will require different solutions based on where they’re at. As a general rule of thumb:
If you’re still in a start up phase – hire the unicorn in small batches, not an employee. It’s the same premise as to why you would lease vs buying a building. It doesn’t make sense to put that overhead on your shoulders when you’re in a volatile and/or active growth stage of your business.
If you’re a well-established business that has had great results from your digital marketing activities already and are spending more than $15K/mth on an employee that you’re not happy with – it may be time to start shopping for your forever unicorn. Please note, to hire a competent full-time digital marketer/unicorn you’re looking at roughly $70K-$120K per year – so it’s not cheap either!
Grab a saddle, and meet your new unicorn!