The fundamentals of a successful business strategy haven’t changed much over the last few centuries, and they are unlikely to fall away any time soon. However, the methods and management techniques used to apply these fundamentals have shifted substantially over the years in response to emerging trends and new developments. Outsourcing isn’t exactly a novel approach, but it has become a much more acceptable and effective one.
Conventional business strategy prioritizes hiring a comprehensive and diverse team of employees that can support all of a company’s core operations—those parts of the business that make you money—from within. While there are several notable advantages to emphasizing in-house staffing, there are also plenty of reasons for modern businesses to avoid the risks of hiring engineers internally.
The Real Costs of Hiring
Hiring and maintaining permanent staff members, especially engineers and other technical professionals, can be a major investment. Calculating overall value and expense is more than just adding up the direct financial costs, but every business decision does need to be weighed in the context of financial gain and loss.
Salary and Benefits
The most commonly contemplated cost of hiring an in-house engineer is the requirement of offering them a competitive salary and benefits package—but is this the most expensive component? Electrical engineers earned a median annual pay of nearly $100,000 a year in 2017, which is similar to professionals in other engineering occupations, according to the U.S. Bureau of Labor Statistics. Permanent staff members also expect periodic raises from most employers as well as opportunities for professional advancement. That second part is something that the typical service company or OEM simply can’t provide. You spend a fortune training them, only to have your in-house engineers inevitably outgrow your company and eventually leave it for better opportunities—typically at an engineering and design firm!
Training and Development
Before an employee can start creating value for their employer, they need to understand the workplace culture, company policies and their specific role within the larger organization. The onboarding process often diverts senior personnel away from normal duties during training and can last several weeks depending on the company. Plus, who on your staff is actually qualified to train a technical expert you bring on to advise you?
Who Holds Your In-House Engineer Accountable?
While engineers are typically brilliant people, they often struggle with the soft skills required to hold a full-time job in a traditional office setting. Concepts like communication and hitting target deliveries, not to mention answer questions with simple “yes” or “no” answers, are difficult for most people who spend their lives only talking to other engineers and with their noses buried in design documents. That means you not only need to hire one engineer, you then need to hire a manager or a translator just to make sure he’s well-managed and held accountable for his projects and continued training.
Speaking of continued training, who is making sure your in-house engineers are at the top of their game? Will they have to compete with other firms and their fellow engineers every day? Or will they just be allowed to milk the clock and/or focus on problems that aren’t directly tied to making your business profitable? Speaking of profits, do you have a professional liability policy that covers their designs?
While these things aren’t true for every engineer, they’re common problems we’ve seen (and had to fix) at a number of companies we’ve worked with when their in-house team inevitably didn’t live up to expectations. And, sadly, it doesn’t always mean you hired a bad engineer; without the constant need to challenge themselves, continue learning and deliver on time, most technically minded people become bored or complacent, and that eventually ends up costing you way more money than you’re making having them on board.
Build Value Through Outsourcing
Some business leaders balk at the idea of spending money on an outsourced professional, but this option can be much more cost-effective after considering all applicable hiring expenses. Working with an outside individual or team also presents a few potential benefits compared to conventional staffing.
No one understands your business (or is as good at it) like you. It’s the same with us; our business is engineering and design, and we do it every day! Outsourced personnel from a dedicated firm, like Practical Engineering Solutions (PES), are independently motivated to expand their skills and embrace innovation in. Plus, you can fire us when you don’t need us anymore. Promise, you won’t hurt our feelings!
Access to Specialists
It’s impossible for a small or mid-sized organization to build a comprehensive in-house engineering team. There are dozens of different specialized disciplines, hundreds of discrete skills within engineering and tons of IT costs. Having the ability and infrastructure to allow for outsourcing places a massive pool of talent at a company’s fingertips compared to internal staffing.
Scales with Need
Salaried, full-time engineers expect to have a job and compensation every month, regardless of the company’s specific needs during that time. Organizations that have limited or fluctuating staffing needs can save a lot of money by working with outside professionals on an as-needed basis.
Take the First Step with Confidence
Outsourcing is not a perfect solution for every business, and it’s not always the right one for every situation. Companies who want to incorporate an engineer’s perspective into their day-to-day operations and workplace culture may prefer a permanent hire to support this vision. Leaders and staff members also have to make a few adjustments to accommodate employees with a limited or remote office presence.
Tapping into third-party resources and talent can be an exceptional business decision that ultimately fuels growth, cuts costs and opens new opportunities. As a committed provider of engineering, design and project management services, PES operates under a client-centered mandate. Our engineers are responsive, accountable and energetic experts who get you what you need, when you need it. Reach out to us today to see what an accountable engineering and design firm can do for your business.