“When you outsource, you have more flexibility,” Bashan said. “You can delay projects. You don’t have that employer/employee relation and expectations, though. But you have better flexibility. Many businesses, not just small businesses, keep 10 percent of their workforce on flexible stop/start schedules based on finances.”
When it comes to hiring full-time employees or contracting out work, long-term viability of the position is a major factor.
“A year ago when COVID hit, we had three clinics in metro Detroit. Like every other visit-based business, we were locked down from mid-March to about mid-May. That makes it a lot harder to bring in revenue. Our expenses are fixed with people costs. The only solution is to let people go,” said Bashan, whose business laid off about 15 percent of its staff during the pandemic.
Williamssaid outsourcing in certain areas gives Rizzarr the opportunity to focus on other areas.
“Bringing on the outsourced staffers, it allows us to produce a greater variety in our creative work and branding so we can concentrate on creating purpose-driven content,” she said.
Neither Williams nor Bashan would disclose how much their respective companies spend on outsourcing annually.
Outsourcing is not without its pitfalls.
Each time new contract workers come on board, they must be trained, which can take four to six weeks, according to Bashan. Areas that seem pretty straightforward can have hiccups, he said.
“In some accountants we’ve worked with, we bring in competent, good people, but one contractor didn’t get the basics of the business and we ran into some issues. Fortunately they were resolved,” Bashan said.
A shortage of software engineers is hurting Hygieia and other Midwest companies as the increase in working remotely has opened more opportunity to work at places previously off-limits.
“A lot of the software companies are on the West Coast. Previously, if you lived in Michigan and you wanted to work for Microsoft or Apple, it was hard. The pandemic has essentially gotten rid of those geographic restrictions,” Bashan said. “If you’re in Michigan, you can now work for a West Coast company and earn a West Coast salary. It’s hard to hire for certain positions.”
Trossen said his company hasn’t been hurt by the pandemic, though it has done less staffing and more compliance work. He declined to disclose Michigan HR Group’s rates but said 90 percent of the firm’s work is billed hourly.
“Some businesses may have changed during the pandemic,” Trossen said. “They may no longer need a full-time payroll or IT person.
“Things haven’t really changed. If you have certain skills, you will always be marketable.”