One of the most common, and most difficult, problems businesses of all types face is whether to hire in-house or seek the services of an agency. David Jaeger, mentor at Result Kitchen, provided his unique take on the question in the podcast. Here are a few examples of what was covered:
Preferences
There are a few characteristics of companies that impact the decision to choose in-house hires or an agency: size, budget, and experience. However, it is better to look at each situation individually to decide how a company can best receive the necessary talent and knowledge in a hire.
Thinking about talent, let?s take the example of a CMO of a company who, a couple of years ago, used to carry out PPC tasks. Now, this CMO has no time and is struggling. What would be best in this situation: an outsourcer or an agency?
Next, you need to consider knowledge. Some people under-value knowledge, trying to squeeze out more from their resources to increase profits and revenue. On the other hand, some people over-value knowledge. They think that they just need to find someone qualified who will put in the hours and the work will get done. This neglects the importance of relationships with Google reps, agency teams, and other factors.
Choosing the Right Option
Let?s start with the example of smaller companies in a competitive space. Most companies experience high competition at a constant rate. For instance, think about AdWords auctions. Here, everyone needs to compete ? and the more advanced competitors bid aggressively.
In these cases, it is a better option to go with an agency than to hire in-house. Agencies can navigate this complex market. In comparison, a full-time hire with the same skills would certainly be far too expensive.
The above case is obvious, but other situations are more confusing, especially when you reach bigger spends. At these levels, it seems as if companies could save significant amounts of money by bringing a hire in-house.
In reality, unless you pour a lot of money into the hire, you are not going to receive the knowledge you need. An agency is once again the better option. Even if you need to spend an extra $10,000 to $20,000 per month for this knowledge, you will have the peace of mind that you are paying someone to execute the work properly.
The Bottom Line
To conclude, it almost always makes sense to go with an agency. You should choose an in-house hire only if you?re looking for a specialist in a very specific subject ? a person with some value that you want to retain within the company.
The rest of the time, agencies make more sense. Although many businesses are driven by the short-term cost savings, in-house hires tend to lead to poor long-term returns.
An in-house hire would be a good solution if you could find a person with the skills you need, but it is usually difficult to find someone with such knowledge and talent outside of an agency ? it is very unlikely that someone with these abilities is just sitting around, waiting to be hired at a reasonably low rate.
To hear about David?s thoughts on the subject in more depth and to gain a better understanding of the reasonings behind his choices, check out the Big Business Challenges ? In-House vs Agency podcast.