Outsourcing vs individuals

Reasons Why Companies Prefer Outsourcing Agencies Over Individual Contractors

Reasons Why Companies Prefer Outsourcing Agencies Over Individual Contractors

The hiring process in the past was pretty straightforward, you would have a vacant position and would hire a person who was better suited to that job. However, today with the availability of outsourcing agencies, companies often wonder whether they should hire an outsourcing agency or individual contractors.

If you are also struggling with the dilemma of “Should I hire an outsourcing agency or an individual contractor”, know that you are not alone! This is a question that companies have been asking since the inception of outsourcing.

That is why today, we will discuss some important things to consider before deciding whether to hire an outsourcing agency or individual contractors for your business needs.

What is an outsourcing agency?

outsourcing agents

An outsourcing agency is a third-party service that provides contract employees to companies for a fixed period of time. They have their own infrastructure and workforce so companies do not have to hire full-time employees.

Outsourcing agencies have access to a pool of talents who are skilled in their respective fields and work according to the requirements of a company for an agreed-upon amount of time.

The role of an outsourcing agency during the partnership with companies includes not only assisting with recruitment but also managing employees and ensuring quality work.

The global outsourcing market grew from $ 45.6 billion in 2000 to $ 92.5 in 2019

What is an independent contractor?

An independent contractor is a person who works as an external agent and provides services to different companies. Hiring contractors require the company to sign a contract with them so they can work on specific projects for an agreed-upon amount of time.

When hiring individual contractors, companies need to take care of finding them themselves and managing their recruitment and other needs.

However, companies are not required to offer independent contractors benefits that they would have to offer full-time employees, such as health insurance.

Reasons why companies prefer hiring agencies over independent contractors

Finally, we get to the interesting part. Let’s explore the reasons why companies prefer hiring agencies to individual contractors.

Outsourcing saves time

One of the most important reasons for companies to hire outsourcing agencies is that it saves them a lot of time. They can focus on running their business instead of sourcing and hiring employees from scratch.

When hiring individual contractors, companies need to go through a time-consuming process of searching and screening them. In addition, they also have to do background checks. However, when working with an outsourcing agency you don’t need to worry about these things as this is taken care of by the company on your behalf.

In addition,  the recruitment process in an agency is more streamlined than when hiring individual contractors, they get access to better resources faster. Hiring agencies can help with training and orientation, which usually takes a lot of time.

The company only needs to provide requirements such as timelines and milestones so they know what kind of work should be done on each project within a given timeframe.

Agencies offer talents with verified skills

One of the most important things when hiring employees, regardless of whether they are internal or external, is to verify that the skills and experiences mentioned in the CV are true.

Outsourcing agencies offer you access to talented people who have been verified by the company itself. These talents are more likely to have already worked on various projects with the agency and the agency knows their true capabilities based on practical experience.

The recruiting process of an outsourcing company targets only those talents whose skills are in line with your business needs so they can provide quality work at their best capacity.

With individual contractors, hiring managers may or may not be able to get a candidate that is skilled enough to work on their project.

In addition,  agencies constantly monitor the quality of work from employees so they can provide you with a better service if needed. They have more time and resources at hand for this purpose as compared to companies that hire individual contractors.

Agencies offer consistency and stability

Individuals switch jobs frequently but an outsourcing agency has a stable workforce. Outsourcing companies have been in the business for years and employees have worked with them for an extended period of time so they can provide clients with consistency and stability.

Outsourcing agencies also offer companies solutions like project managers to manage their contractors efficiently, which is another important benefit that businesses get when outsourcing.

Outsourcing provides more talent options

Another reason why companies prefer outsourcing agencies to individual contractors is that they have access to a larger talent pool. This allows them to hire the best people for their company’s specific needs and requirements, which would be difficult if they were hiring independent contracts who usually provide services in isolation from each other.

For example, instead of separately looking for, interviewing and hiring software engineers and web developers, companies can find them in one place through an outsourcing agency.

Outsourcing saves money

save costs

Companies can save a lot of money by hiring outsourcing agencies. They only have to pay for the actual hours worked and no more than that, which is quite convenient if you need someone with specific skills over a limited time period.

In the case of outsourcing agencies, companies do not have to pay for human resources services that search for employees and negotiate contracts each time a new employee is needed. This means that you will likely end up spending more in terms of hiring fees, background checks, etc., which add up quickly over time.

Instead, you can have instant access to a wide pool of talents with the help of outsourcing companies. This is not only convenient but also a profitable method of filling the talent gap within the company.

Outsourcing helps firms save an average of 15% on their expenses, according to the International Organization for Standardization (ISO).

Outsourcing is safer 

When partnering with an outsourcing company, there is a set of documents that makes the company accountable for the agreed responsibilities and duties.

These documents hold the party responsible for ensuring corporate confidentiality or that the high quality of work is delivered. Outsourcing agencies dedicate their utmost attention and time to ensuring that all the aforementioned agreements are fulfilled, as it directly affects them not only financially but also in terms of good reputation and word of mouth.

And in the event that unexpected issues arise, such as you are not satisfied with the quality of the work, they are there to solve it quickly and will instantly offer an alternative talent that can better meet your expectations.

However, in the case of an individual contractor, there is a greater probability of not receiving that type of support, which can bring many problems and delays for your business.

For example, in case you are not satisfied with the work of the individual contractor, you will have to go through the grueling process of finding an employee again, which will greatly affect the speed of execution of your project in a negative way.


Hiring independent contractors can be a good option when you need quick help with a small task for your project. However,  if you are looking for a long-term solution to your talent gap, outsourcing companies provide more benefits and advantages.

Businesses consider outsourcing because it is more beneficial in terms of time, money and consistency. They have the required tools to manage their workforce efficiently which allows them to operate smoothly without any major problems or interruptions.

With this, you do not need to worry about your project’s efficiency as they will always be there to ensure that your project runs smoothly and meets the required deadlines.

Looking for an effective way to fill your talent gap without sacrificing the quality of work? Schedule a free consultation with us today and let’s discuss how our services can take your project to the next level!

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© 2021 - MaxinAI | All Rights Reserved
© 2021 - MaxinAI | All Rights Reserved