Deciding between who to hire: an Agency versus a Contractor versus Hiring?
While you’re scaling the efforts of your team, you’re running into bottlenecks as you grow. The faster you go, the more often you lack the resources to add new initiatives or improve existing channels & functions. Time after time, you find yourself identifying the gaps in your marketing organization (or others) trying to figure out how to stitch those problems. In the end, it’ll likely come down to the answer: you need more people/skills/experience/knowledge/time to go faster.
A few weeks ago, Rand Fishkin posted a similar blog post on the topic of Why You Should Hire Agencies & Consultants (for everything you can). As you could already read in his blog post, as it mentions the tweet that I replied to, it was a topic that resonated with me. I also had a similar past to Rand in which we both, it seemed, chose the hiring (FTE) route often over finding agencies or contractors.
I’m not going as far as Rand by suggesting that you shouldn’t hire. In many cases, in my opinion, this is the right answer. But there is more out there, like agencies, consultants, interim, crowdsourced tools that could help you fulfill the same needs.
This also came to mind during the process that we went through at RVshare leading up to the investment by KKR (read more about that here) a few months ago. One of their advisors asked this specific question while discussing our marketing strategy:
“To scale this function, would you outsource the execution or hire internally?”
There is no right or wrong answer to any of this, as it all depends on the situation you find yourself in as a manager/executive. What all strategies have in common is that they require more resourcing. You have a need for it that you currently can’t fulfill with the (extended) team that you have.
At the past companies that I worked for, there was always a slightly different strategy. At The Next Web, we hired people and filled the execution gaps with interns in certain periods (the system for interns works differently in most of Europe than the US as they can support you throughout the whole year where the majority of internships in the US take place in Summer). At Postmates, at the time, it was different, and the focus was primarily on hiring in-house (senior) experts as there wasn’t too much time to train people as the company was blitzscaling.
🌍 & 🌎 – Europe versus the United States
When the question got asked at the beginning, a few thoughts came to mind. I’ve been working and living for close to four years now in the US and previously for many years in Europe. As the US is a bigger country with a different educational system and different wage ranges (even across the US), the approach is often different. Some topics that came to mind about the differences:
- Interns: I touched slightly on this, but Europe’s system enables to train young people more easily throughout the whole year as most educational setups have year-round periods for internships.
- Wages: In general, wages are much higher in the United States than they are in Europe. This sometimes causes just issues in hiring, where you could hire somebody for a similar role in Europe for 70K that same person might cost 100K in most of the United States (with exceptions reaching much higher).
- Experience at Scaling: There are different approaches to this. In the wider Bay Area, more people have grown up in a tech ecosystem that has shown them how big tech companies operate. As Europe, in general, is a bit behind that it sometimes impacts how they can operate at scale.
Again, this is not me judging Europe or the United States to be better. They both have a place in the overall ecosystem of hiring and extending your resources.
What’s the right approach? What to consider?
- Short versus Long term needs: For short term needs like a copywriting project, designing a slide deck, creating an explainer video, you can’t convince me easily that they’re worth hiring for. You won’t find all those skills in one person, so it makes more sense to hire.
- Cost: Let’s face it, the costs of a contractor/agency are higher right away, but don’t forget about all the additional costs an FTE brings with them (insurance, travel, office in a non-COVID world).
- Depth of the Bench: Many sports teams have outstanding players sitting on the bench; this is a huge upside of agencies, for example. They often have well-trained teams that already have experience working with similar clients ready to roll directly onto your team and help out with efforts. Especially in functions like media buying, PR, and many creative services, I’m having a hard time seeing how you would be able to defend hiring for those positions solely internally.
- Specialist versus Generalist: For smaller startups, it’s not always possible based on costs or the skillset to hire the right person right out of the gate. It’s the reason why many startups take off with a bunch of generalists and, while they grow, start adding more specialists to their teams. For example, I myself used to be a specialist as well (search and analytics). Over time while moving up the ladder, I became more of a generalist (welcome to executive life) than a specialist. For some roles that you’re looking for, it means that you might be better off with a consultant as they can provide the specialist skills that you’re not ready to hire for (just yet).
- Range of skills / Many Hires: As a follow-up on this, what you face as well as your scale is that you have a range of needs that even a specialist in an area can’t solve for you. This is usually where agencies come into play as they have a range of skills available for you usually in the mix of 1 FTE. I’ve blogged many times before about our working relationships around Analytics. We use Marketlytics there as part of our setup as they know their stuff incredibly well and have many skills on the team (analyst, engineer, project manager).
- Scale fast: Hiring is slow. There is a reason why big organizations sometimes have hundreds of different roles open at the same time. They just can’t hire people fast enough. This is mainly a problem at the top of the funnel. You don’t know enough people or can’t reach them quickly enough. It’s one of the reasons why you should always be talking to people to get them potentially interested in joining your company long-term. So consultants/contractors could be your temporary fix as they can usually provide a quick specialist approach to your needs. In addition, if you need to prove a business case, they can provide temporary support.
- Tunnelvision: It’s surely is a thing. If you’ve been staring at the same problems for years and working with the same people for a while, you likely get stuck in this. A new fresh pair of eyes or agency team probably has a different approach that could help bring additional growth.
What am I missing? What are the areas that you prefer to hire against trying to find an agency or consultant? Leave a comment so we can discuss it. This will likely be one of those blog posts that I’ll keep up to date over time as I learn new things.