The Cost of Hiring an Inside vs. Outsourced Sales Team
33% of companies outsource their sales department to an external agency.
The decision to outsource sales to an agency or rather invest in an in-house sales team is one that almost all businesses have to make. As your company grows, you’ll have to make significant changes to the way you run it.
One of those changes is keeping your sales momentum going by trying to increase your sales. But this decision is not easy to make because it will directly impact your companies’ financial health. So now you’re faced with the question: should I hire employees or should I outsource to a sales agency.
The choice between insourcing and outsourcing is difficult to make, especially when you’re working with a small budget. To help you make a thoughtful choice, we’ve compared the costs of in-house sales to those of external sales firms.
But before we get to the costs let see how the internal sales team differs from the external sales team. Using an external agency can save the time and resources it takes to learn on your own. Why? Because an established outsourcing firm has experimented with a variety of tactics and knows how to satisfy clients. Outsourcing to an external agency will save you money.
Companies spend 26% of their time on training their in-house sales team.
On the other hand, an internal team will be very knowledgeable about your business. However, this doesn’t mean that they have the skill and professionalism to do a great job. Apart from that, you may also face difficulty when searching for the right talent to fill your in-house team. Another big hurdle is that internal teams are quite costly and they may gobble up a huge part of your budget.
Cost Comparison: In-House vs. Agency
A side by side scenario of in-house sales and outsource agency shows that it is cheaper to hire an agency. Why? Simply because hiring an in-house staff will quickly ramp up the costs as it includes one-time and ongoing expenses.
Annual expenses for in-house sales development representative is $120,520.
I’m talking about recruitment costs, salaries, additional employee costs (benefits and taxes), Overhead, etc. A Human Capital benchmark report found that the cost of a new hire averages at $4,129. And this is only recruitment costs, now think about all the other expenses your company will incur.
Working with an agency, on the other hand, is much cheaper and maybe a better value. Outsourcing your sales to an agency means no additional employment costs, such as recruitment, benefits, employment taxes, and overhead. Plus, an agency’s focused and specialized experience can provide a greater ROI in the long run.
Making the decision to hire in-house staff or outsource your sales to an external agency can be difficult. Keep in mind that an outsourcing agency will in most instances be cheaper. Clearly, you won’t have to invest a large sum in an external agency and you won’t have to train for months before their workers are ready.
Let us know in the comment below if you have ever outsourced your sales to an external agency or kept it in house and what the costs were.