Freelance: Subcontracting vs. Outsourcing

In the world of freelancing, there are common terms that come up, and two of these are “subcontracting” and “outsourcing”. On the surface, it might look like these terms are the same, but they’re not. As freelancers, we may be subcontracted or outsourced work, and we might also subcontract or outsource work to others. But what’s the difference between these terms? And is it ethical to subcontract or outsource?

What is outsourcing?

When you break down the word, “outsourcing” is simply sourcing work from outside yourself or your company. This might be because you don’t have the time, skills, knowledge or capacity to do the work. For example, I outsource my accounting to an accountant, because he knows about these things far better than I do. A publishing company might outsource all of their proofreading to freelancers. And a business might outsource their HR to a specialist company.

What is subcontracting?

real-estate-2081571_1280.pngSubcontracting is like outsourcing in that you get somebody external to do the work, but the difference is that you’ve already been contracted by somebody else to do the work. You then contract somebody else to do all or part of the work, thus subcontract. A website developer might be hired by a client to create a website, then subcontract a graphic designer to create images for it. But the graphic designer only deals with the web developer and has no contract with the original client.

Can you do it?

With outsourcing, there are no third parties involved, so it’s generally fine as long as you have a clear agreement and terms of business in place that both parties are happy with.

With subcontracting, it depends on a few factors. If you’re working through a freelancing website, you’d need to check their T&Cs, as they generally prohibit subcontracting. If you’re working privately, you’d need to check the terms of business agreement with the original client to see whether subcontracting is permitted.

Should you do it?

With outsourcing, finding someone skilled to do work that you can’t do or don’t have time for is a good idea, as it frees up time and brain power, but you should only do it if you can afford to and if you trust the person to do a good job.

With subcontracting, it really depends on your intentions and how you go about it. Some people subcontract in an ethical way to offer the best possible service, while some are simply exploiting other freelancers to make a profit themselves without doing the actual work.

What are your intentions?

If your intention with subcontracting is to make a profit for yourself by getting someone else to do all (or most) of the work for low rates, then it’s not very ethical. It’s dishonest to the buyer, as they’re hiring you in good faith that you’re completing the work, but you’re not. And it’s unfair to the freelancer as you’re earning a profit from their work, but they’re not getting credited or fairly paid for it.

On the other hand, if your intention is to do most of the work yourself and hire another freelancer to do part of the work that you don’t have the time or skills for, then that’s different. For example, some freelance writers subcontract their proofreading to a skilled proofreader to check that their writing is error-free before submitting to their client, and that’s fine.

What can happen if you unethically subcontract?

feedback-3239454_1280If you subcontract solely to make a profit, then it can backfire. Would the client be happy if they found out they were paying you more while someone else did the work and you made a profit? Would the freelancer be happy if they discovered they were getting paid less and you were making a profit off their work?

If these things happened, you could potentially lose both the buyer and the freelancer, and you’d get a bad reputation or negative feedback. For most freelancers, having a good reputation is important, as it’s what gets you future work, as is keeping hold of clients. On a freelancing website, it could get you kicked off the site and blacklisted.

Can you ethically subcontract?

consent-2052052_1280.jpgIf you decide to subcontract, you should pay the freelancer a decent rate for their work and tell them it’s for another client. You may also need to tell the client that you’re subcontracting part of the work to another freelancer. For example, as a book editor, if I need a designer to format the book, I tell the author that design services are outsourced to a trusted designer. This way, everybody knows what’s happening and gets the chance to say if they’re not happy.

Have you ever outsourced or subcontracted work? How did it go? Had any outsourcing disasters? Comment below or get in touch.

Stay tuned for more freelance tips every Monday, Wednesday, and Friday.

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