Hello. My name is Gene Marks. And I am an outsourceaholic.
In this political environment, it's embarrassing to admit my habit. I frequently hang out with other outsourcers. I know according to some these people are a bad influence on me and America. But it's a well-known secret that there are many outsourceaholics like me who binge on outsourcing. This is an unspoken epidemic in this country. For many of us outsourcing is a quick high and a way to feel... oh, I don't know... cool and (dare I say it) profitable. I do a lot of outsourcing at nights and on the weekends, because the people who I outsource with (particularly in my industry) work this way. I selfishly hoard my best outsourcers from my friends so I can have them all to myself. I frequently pass out from the excitement of making money from outsourcing. Yes, I have employees. But in my heart I'm an outsourceaholic. It is an addiction. And I see no cure. Why would I want to be cured of this anyway? It's just too appealing.
For example, when I outsource, I pay less taxes. I get this unique rush because I'm not hiring them as an employee. So that means that I'm not subject to certain employer-related taxes, the most significant being the matching FICA and Medicare tax on their earnings. For 2012, the FICA tax is 4.2 percent (and is scheduled return to its prior 6.2 percent next year) on an employee's earnings up to $110,00. And the Medicare tax is 1.45 percent (also going up next year). As you can imagine, the authorities aren't crazy about this, so I've got to be very careful about where and how often I outsource. And I follow these very strict guidelines from the IRS just to be sure.
I don't have to pay other benefits too. Not paying taxes is one thing. Not paying other benefits makes me want to keep the party going. Subcontractors don't need healthcare, vacation, sick days, jury duty, 401K matches, disability insurance, membership to health clubs or car allowances. They don't require life insurance, child-care subsidies, bonuses, adoption assistance, healthy snacks in the lunchroom. They don't require lunchrooms, either. These lower demands fuel my outsourcing addiction.
And my addiction costs even less because I don't have to include subcontractors on any tax filings and I don't have to track their year to date wages and taxes and other withholdings I don't have to get my payroll service company involved. My bookkeeper doesn't have to keep separate paperwork on their benefits, taxes and child support payments. We don't need to track vacation and sick days. And we certainly don't have to liaise with any unions. Our subcontractors send us an invoice and if it's approved we pay in our normal weekly check runs. No habit is clean. But the outsourcing habit is.
I avoid unnecessary overhead too. I'm lucky enough to be in the technology business where I can feed my habit from my home office. My company is completely virtual. Therefore I have very low utilities, phone and Internet costs. I don't have to worry as much about insurance, auto expenses, continuing education, office supplies, office equipment, repairs, maintenance, trash removal and the inevitable downtimes that occur over the summer and Christmas holidays.
As an outsourceaholic I can enjoy just about any type of outsourcing I can get. And I can be picky if I want to be. This means that when I need a developer who specializes in mobile applications for the iPad I hire that person to do the job. When I need help with telemarketing I hire a person with that skill set. I don't have to resort to synthetic or copycat solutions. By outsourcing I get the real deal.
I can easily find my contractors too. In the past I had to make much more of an effort because all I could do was take out an ad in a local newspaper. Today, I can find that specific expert where he or she lives by going online at great sites designed for that purpose. But it's a two way street. "If you want to find someone great, you must be a great client too." Says Fabio Rosati, CEO of Elance, an online platform that connects independent professionals and businesses. "Recognize that talent is at least as selective as you are and that people who read your job post are asking themselves: "would this be a good client to work with?""
I can effortlessly connect people to my office. There are countless ways to feed my indulgence. Using subcontractors in 2012 is way easier than it was years ago. That's because I can hire anyone, anywhere, as long as they have an Internet connection. And then I can use very inexpensive technology tools to get them connected to my office. Rather than listing them, start with this piece. Geography is no longer a limiting factor.
I promote (and teach) entrepreneurship. Some people look down their noses at us outsourceaholics. But contrary to what they may think, my subcontractors like outsourcing with me and do this of their own free will. They are not employees because they don't want to be employees. I look for people who are themselves entrepreneurs. They work from home or have very small organizations and they have a niche expertise. Sometimes I work with budding entrepreneurs -- people who are out of work and never want to go back to being employed again. I help them with the process of starting their business -- invoicing, bookkeeping, time management, etc. I share with them what I've learned as a business owner. For many of my subcontractors I feel as if I'm helping them become better entrepreneurs.
Outsourceaholics like me promote freedom and flexibility. A great majority of contractors I work with are happier than the employees I encounter at clients. That's because they have a different lifestyle. They make their own hours. They work from whatever location suits them. They can hire and fire their clients. Don't get me wrong -- there are plenty of downsides too, the most significant being not having a paycheck during slower times. But I'm very hands off with my contractors. I'm not bothered when they work and how they get their job done as long as they get it done on time and they do what they say they're going to do. That's a different experience than you'll have at most employers. For some it's a great change.
As an outsourceaholic, I don't have to explain what I do and especially why I hire and why I fire. I don't have to watch what I say. I can ask about a person's family because it's fun to talk about their kids. I can learn about a person's religion because it's interesting to me. For the most part, I don't have to fear being slapped with a discrimination lawsuit. I don't need to have an exit interview or have them sign a waiver of all liability. I don't have to pay severance or fear the same kind of recriminations I have with an employee. If a contractor doesn't do what he or she says they're going to do I can just stop using them in the future. It's as simple as that.
Finally, I can try people out. Hiring an employee is a huge commitment. Sometimes it works, and sometimes it doesn't. Untangling oneself from this relationship can be painful and complicated. Not so with a subcontractor. If things are working then that's great -- we'll keep working together. If it's not working then oh well... best of luck elsewhere.
My name is Gene Marks and I am an outsourceaholic. Don't even try to intervene.
A version of the above appeared on Inc.com
Follow Gene Marks on Twitter: www.twitter.com/genemarks