What Is an Outsourced Contractor, and How Can They Boost Your Business Strategy in 2024?

Outsourced Contractor

An outsourced contractor is an independent worker who you hire to fill a specific role on-demand. This person does not work directly for your business, instead usually working either for themselves or for a third-party staffing agency. 

For companies with adaptive talent requirements, an outsourced contractor strategy can be a great fit, alleviating the need to keep a full-time bench of technical resources, and simply scaling up and down as necessary from an external talent pool. 

Fiverr Enterprise is a Freelancer Management System (FMS) that helps you build that talent pool, with pre-vetted and ready to work contractors that are compliant for your business needs. 

Keep reading to find out exactly how to get the most out of outsourcing technical talent. 

Understanding Outsourced Contractors vs. Freelancers

If outsourced contractors sound a lot like freelancers — don’t refresh your screen, you’re right! There are many similarities between freelancers and outsourced contractors, with some businesses using the terms interchangeably. 

However, most people use the term freelancer to refer to a short-term arrangement of a single project or task, while a contractor denotes a more long-term arrangement where an organization fills a specific skills gap which may be needed for a wider range of tasks and projects over the period of months or years. Whether you use the term freelancer or contractor, it’s in the business’ best interest to form long-term relationships where you can keep utilizing professionals who are a great fit for the company. 

Benefits of Outsourcing Contractors

Most companies don’t need the same level of staffing at all times. Prior to a product launch, you may need more developers to get a feature over the line on time, or during a seasonal spike in demand — you could want extra support in customer success. With an employee-only strategy for your workforce, it’s impossible to scale up and down as your requirements demand. That means your business pays for staff that it doesn’t need during quiet periods, and demands superpowers from existing employees at ten minutes to midnight. Only using freelancers and contractors allows for the necessary amount of scalability and flexibility for your workforce. 

There are also economic benefits to this approach. Using an outsourced contractor strategy, any business can be a lot smarter about staffing, reducing the costs of hiring additional full-time staff, and managing their budget intelligently so that labor expenses are used where they are needed the most. As you’re eliminating resource uncertainty, you can say yes to more projects and know that you always have the supply of talent to meet demand. 

Another benefit of outsourcing contractors is the access to specialized skills that are not available in-house. You may currently have full-time developers with good knowledge of Python and C++, but you want someone with a niche understanding of LISP for a specific AI or Machine Learning project. Many freelancers have this niche expertise, and are happy to come on board to support a specific task or product for a limited time. Instead of diverting full time staff from their core business functions, outsourcing contractors means that peripheral activities such as building a website or launching a mobile app can be handled quickly and with the right expertise, while in-house employees keep doing the work they know and love. 

Managing Outsourced Contractors: Challenges and Solutions

Working with contractors is a different ball game from managing full-time staff. If you’re thinking about expanding your strategy for working with freelancers, consider these 5 questions before you begin: 

  1. How will you deal with cultural differences? One great benefit of outsourcing is the ability to work with anyone, from anywhere. However, not all cultures work in the same way. You may need to think about how different people would prefer to receive instructions and feedback for example, as well as manage practical elements such as time zones if you’re calling meetings or roundtables. 
  1. Do you have a process to maintain quality control? The standard of work from contractors will certainly vary, and you don’t have time to train new freelancers — you want them to be able to hit the ground running. Make sure you have managers in place who will feed back on the standard of work, and processes that allow you to form long-term relationships with the best talent, and easily offboard those who don’t work for your team. 
  1. Are there confidentiality or security concerns? Especially if you have a large turnaround on projects and clients, you need to make sure you’ve covered all your security bases. Set up workflows so that contractors can easily sign the right documentation, from NDAs and IP agreements on entry, to revoking systems access and rotating passwords when it’s time to close a project or relationship. 
  1. What legal and ethical considerations should you know about? The main legal concern when hiring freelancers and outsourcing contractors is misclassification. If you hire a contractor and treat them as an employee, you may be liable for back taxes, employer contributions, and even fines and penalties. Remember, there is no one-size-fits-all, as misclassification rules differ between countries and even across State lines. 
  1. How will you find and hire quality contractors? For many businesses, the fear of a contractor strategy is finding top talent. There are hundreds of options, from freelancer marketplaces to specialized job boards, professional networks, and even good old word of mouth. Once you’ve found contractors who can compliantly and effectively work for your business, make sure you can easily share their talents, availability and requirements across the company. 

Fiverr Enterprise Helps You Find Outsourced Contractors with Ease

Fiverr Enterprise provides an IT talent pool, curated especially for you — one place where you can gain instant access to your own carefully vetted Dev & IT talent, that’s ready-to-hire and able to meet your business requirements. 

Finding and maintaining relationships with multiple staffing agencies adds overhead and takes a lot of time and effort. Instead, Fiverr Enterprise is a Freelancer Management System (FMS) that takes your job posting, and replies with 2-6 pre-vetted candidates in just 48 hours. Need to ramp up faster? Choose from our database of vetted freelancers who are ready to start working today.

With Fiverr Enterprise, you can quickly hire compliant tech expertise at a fraction of the cost, eliminate resource uncertainty altogether, and maintain consistent workforce quality for any role. Our SaaS solution enables you to confidently take on more projects, knowing you have a dedicated talent pool that’s always available. 

Interested? Schedule 30 minutes with one of our workforce experts who will walk you through the platform.