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To FTE or Not To FTE: Should You Outsource Your Marketing Automation?

August 21, 2014 | Justin Gray | No Comments |

So you’ve decided you could benefit from the services of a marketing automation team. Smart decision. I don’t have to tell you (although I’m going to anyway) that having a dedicated team working on your MA initiatives is going to skyrocket the benefits, like accelerated sales cycles, higher conversions and deeper customer engagement. Assigning it to a current employee’s already overflowing plate just won’t drive the same rewards.

Now because you’re smart (yes, I know you’re smart; you read this blog, after all), you’re probably thinking about cost. Which means that you’re probably deciding between hiring a full-time employee versus outsourcing to an agency.

First let’s stack up the benefits for each. Hiring an employee? It used to be that meant you had someone sitting right there in your office, available and at your command. These days, though, odds are that one or both of you are working remotely, so that’s not such a benefit these days. Also, a single employee has one skill set: his or her own. Hire an outsourced dedicated team of resources, however, and you’re accessing a team with depth and breadth of experience in marketing automation and CRM and maybe sales. Now you’re tapping a rich well of insight, strategy and skill.

But surely, you say, that will be so much more expensive. Actually, not so much. In fact, not at all. Why? Because the costs of hiring that one employee with the limited skill set can go as high as $180,000.

No, that’s not an exaggeration. Let’s start with just finding that person. We’ll call him Ted. You’ll advertise, hire a recruiter, conduct interviews, wait through the rounds of assessment tests and background checks. Ted hasn’t even started yet and you’ve already spent weeks if not months on the search and thousands of dollars.

Finally Ted officially joins the team. Now you’ve got training costs, which can go surprisingly high. According to a report from Training magazine in 2007, companies spend an average of over $1,200 annually per employee. Of course, in addition to Ted’s regular salary, you’ll have to foot the bill for a benefits package that can comprise up to 40 percent or more of his income. Does that sound high? It isn’t when you consider all that goes into a typical benefits offer, such as health insurance, gym memberships, life insurance, disability coverage, dental plans, tuition reimbursement and so on.

Once Ted is established in the office, you’ve got to allow time for him to ramp up; after all, no one kicks off a job at full productivity. It takes months – an estimated 20 weeks for professionals and 26 for executives – to hit their stride. One Harvard Business School survey of 610 CEOs estimated that typical mid-level managers require 6.2 months just to offer break-even value.

In other words, you’re paying out long before you even see a return. That’s not even counting the increased tax liability you shoulder with each new employee. Or – sorry but I have to mention it – the reality that Ted’s probably going to move on one day and you’ll have to start the whole process over again. Employee retention is every company’s holy grail for a reason; turnover is astoundingly expensive.

Maybe now you can see why hiring an outsourced team can be a savvy and economical move. They can hit the ground running, no training costs or ramp-up period required. Having their collective experience, tactics and ideas at your fingertips means that you have access to a marketing automation brain-trust no single employee can match. Remember, the outsourced team will have different backgrounds and perspectives, which means that your MA programs could be informed by a collective wisdom gleaned from marketing, sales and the customer side. And of course, hiring professional services is a tax-deductible expense, unlike the tax burden of acquiring full-time employees.

So yes, cost is always a factor when you decide between staffing up and outsourcing. But remember that ultimately all costs will be returned if the new and improved marketing automation program delivers higher ROI. It’s just a matter of putting the right skills behind the technology – and in most cases, the outsourced team is going to win that contest. We put together a full cost analysis on the costs of running a world-class marketing automation team, and you can learn more about it here in our Costs of Running a Marketing Automation Team infographic.

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