Article Summary:

The article I read focused on how different companies are using contracting in their favor. Dr. Eran Bashan founded Hygieia Inc., a small business that develops diabetes management medical devices. His small staff of 30 focuses on highly technical research and development projects but does not have expertise in other areas required to successfully run a business. Therefore outsourcing certain jobs is critical to small businesses. It allows the owners to focus on more critical aspects of the business that differentiates the company. For example, "Hygieia, which currently employs 30 people, outsources in multiple areas, including software development, quality systems, finance and marketing" (Davis, 2021). They reserve full time positions for more technical jobs that provide needed value over a longer period.

Contractors generally demand a higher pay rate but save the business time and money in the long run. This is exhibited in the article, "Bashan pays a contractor more than he would if they were a full-time staffer, but that prime rate is for a high level of expertise in a specific area for a short period of time, saving the business in benefits and other costs" (Davis, 2021). Small businesses outsource for very different reasons than large businesses. Small businesses need to outsource some things because they can't replicate what a skilled contractor can do. There is a key difference between consulting and outsourcing. Consulting is where a hired individual teaches the business how to perform a task, outsourcing is when the hired individual does it for themselves. The decision for a company between outsourcing, consulting, or a full-time hire is dependent on long-term viability.

There are a few pitfalls of outsourcing. Those include the required onboarding time for training, the outsourced employees understanding of industry details, and a general shortage of knowledge and qualified contractors.

Article Reaction:

This article did a very thorough job of explaining how a contractor can be beneficial to small and large companies alike. Small companies have limited resources and need to focus time and energy into the details of the company that differentiates them from their competition. For more general work, such as marketing, finance, and web development, that work can be outsourced to people who are more efficient and experts in that field. One area that I'd like more information on is the trade study to determine whether outsourcing is more financially efficient than hiring someone full-time. The pitfalls for outsourcing are interesting. One negative was the required time for onboarding. Companies invest a lot of time and money into training their workforce. Even though they may choose a limited onboarding process for contractors it is still an investment with limited long-term gain. The other is that there is a shortage in qualified contractors. This item sparks the thought in my head of possibly becoming a contractor myself. There is a lot of financial opportunity as a contractor but the job security of a full-time position is worth a lot.

What are your thoughts?