Entrepreneur: Hire an agency or employees?

4 minute read

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If we have learned anything three years post-Covid, it is that it is OK to challenge the traditional way of work. While 95% of the discussion is absorbed in the “work from home” debate, the very act of traditional work has been challenged in itself.

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Most of what you read and hear is from the lens of an employee, but how are things changing from the employers perspective – the entrepreneurs & leaders – in the evolving landscape of work?

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Let’s take a closer look, specifically through the lens of an entrepreneur in a growth phase.

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An entrepreneur has 4 options to build, grow, or get something done:

1. Do it yourself
2. Hire an employee
3. Hire an agency
4. Hire a freelancer

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How do you strategically navigate between these options for optimal results?

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The first option “do it yourself” often gets cut because there is only so much you can do as one person. Odds are, if you are in a position of growth, you already have done a lot as the Day 1 employee (aka entrepreneur). Although you will be involved in upcoming expansion efforts, you must choose between the other 3 options: expand the team, outsource to agency, or hire an individual freelancer.

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If the project is small (under $1,000) and discretely defined, such as needing a simple blog post written in one week on how to make avocado toast, your best option is hiring a freelancer. Why? 

• You save a lot of time
• There is no commitment or risks involved with contractual employment
• You do not have to spend money or time hiring & training for the role
• If something goes wrong, the risk is low

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In effect, like AI, a very short task for a freelancer is transactional and to the point.

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However, for larger and more complex projects, there thus remains 2 options:

1. Hire an employee & expand the team
2. Hire an agency

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The first choice is the traditional route. 

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What is involved in hiring employees? Well, here is a quick list:

1. Writing a job description
2. Recruiting and scouting the market for the right candidate
3. Interviewing; and referrals, background checks, etc.
4. Providing compensation package that includes healthcare, dental, and more
5. Hiring for HR
6. Managing & monitoring results
7. Providing training & career growth opportunities
8. Making an intentional effort to boost morale and keep employees motivated & engaged
9. Dealing with internal conflict, such as employees not getting along with other employees
10. Terminating an employee or replacing the employee when he/she leaves

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The list goes on. It is a lot of work, but it is of course a part of doing business.

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Nonetheless, a massive problem exists that has caused leaders an immense amount of pain during periods of growth. Through numerous studies we found, the 3 biggest problem CEOs and leaders face with their subordinates and employees are:

• Inadequate time management and productivity: CEOs may express frustration when employees struggle with time management, fail to meet deadlines, or exhibit low productivity levels. This complaint often arises when employees are easily distracted, lack focus, or fail to prioritize their tasks effectively.
• Lack of initiative and proactivity: Some CEOs may find that employees do not take the initiative or demonstrate a proactive approach to their work. This can include a lack of creativity, problem-solving skills, or a tendency to wait for instructions rather than taking ownership of tasks.
• Lack of accountability: CEOs may complain that some employees fail to take responsibility for their actions and are unwilling to be held accountable for their performance or mistakes. This can hinder productivity and the overall success of the organization.

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To sum that up, leaders, particularly in fast-growth companies that need to “go go go”, wished their employees would act as generals or captains, and not mercenaries or soldiers.

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This makes sense and contributes to the fact that employers, too, are challenging the status quo in how they hire and “get things done”. This is perhaps why, by the end of 2023, companies will spend $971.2 billion on outsourcing, external team augmentation, & shared services.

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What has caused the rapid expansion of outsourcing and external team augmentation?

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To say we have the answer is wrong, as it is complex and extremely nuanced, but there is one key data point that points to one of the answers: in hiring an agency to handle a project (or even an entire department, such as advertising) you get the aforementioned captain or general. 

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As an entrepreneur, when you hire an agency, you are literally hiring another entrepreneur because that person decided to create their own entity and brand, putting their identity on the line to produce something great. Everyone gets pleasure from saying "I built that." If you hire them, they of course care about what they produce for you, but what really drives them is the satisfaction of seeing themselves & their team produce real results. What is the #1 thing that drives A-players? Meaningful work and accomplishment. In effect, you send off the project and it is in good hands because the element of care exists wholly.

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As a result, it is no surprise that entrepreneurs and leaders are increasingly working with agencies who they know and trust to create terrific results. (Caution: just like how you can hire a bad employee, you can also hire a bad agency, so be sure to always do your diligence, such as using 50Pros as a source to discover vetted agencies!)

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The biggest, pleasant surprise that many companies find when hiring an agency is that it is not transactional, but an extension of a healthy balance within their own team.

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Plus, when you are ready to pause for any reason (i.e. cashflow or downturn market), there is no payroll or severance package to worry about -- the agency understands and is already working with other clients. It is a beautiful cycle of independence.

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To be clear, we are not advocating for only one of the four options, as it is the job of the entrepreneur and leader to determine how to best leverage their options to create something that works for them. But we too often see visionaries handcuffed thinking there is only 1 way to do things; and as the saying goes “There’s a thousand ways to skin a cat”.