Internal Or External: The Pros, The Cons, And The Savvy Choice

The factors

Resources

While internal teams have a finite structure and need to adapt their skills to meet the diverse needs thrown their way, external agencies have a wealth of talent at their fingertips – either in-house or through partnerships forged while working on other projects. What’s more, if a project takes a turn for the unexpected – as projects can do, particularly when led by a less experienced team – an internal team will have to accommodate the additional resources required, which means that any additional spend over the budgeted amount must be sourced internally. Due to their increased experience, an agency is much less likely to underestimate the resources required for a project; if they do, the additional cost will usually be their responsibility.

Access and communications

One big concern that clients have regarding engaging external agencies is the lack of access or open communications networks, which can cause bottlenecks and slow down progress. This is not unjustified: if an organisation works with a larger agency with high numbers of clients, conflicting priorities, and high turnover of staff, it can be a challenge reaching out to the right person. However, with the right communication strategy and structure in place, and a steady rise in remote working, external agencies now have the capacity to be just as accessible as internal staff.

Understanding of the organisation

There is no doubt that an internal team will have a greater understanding of the organisation, its ethos and aims. This is a definite advantage when it comes to understanding and adhering to the brief, but it can also be a downfall. An internal team, by default, has bought into the organisation’s ethos and aims. This means that they are unlikely to question the wisdom or effectiveness of an approach or strategy and that they are less likely to be able to take a step back to see the approach from a consumer’s perspective – or two steps back, to look at it on an industry-wide level. A skilled agency’s ability to place an organisation, brand or campaign in context – to see the wood for the trees – allows for an objective viewpoint, which is more likely to yield long term results.

Understanding of the industry

Without specialist skills, staying abreast of continually changing demands and technology can be a challenge for an in-house team; as a result, they may create something that is great now but doesn’t factor in future challenges due to a lack of foresight. The right external agency will have high levels of insight gained from extensive, cross-industry experience. This will allow them to plan for the present and the future, whatever that may bring.

Onboarding

In addition to the 30% on costs required for in-house staff, the onboarding process can be lengthy; don’t be fooled into thinking that you can onboard rapidly – studies show that faster onboarding leads to lower retention rates. Conversely, agencies can be deployed, briefed and working in a matter of weeks.

Risk

There are two ways of looking at risk: risk to the organisation, and risk to the agency or staff. As far as organisational risk is concerned, external agencies carry far less risk than hiring and using internal resources, simply because if you don’t like what an agency is doing, they are contractually obliged to rectify it at their own cost.

Staff risk comes down to accountability. Agencies work hard to gain contracts, and once secured, they will work even harder to deliver above and beyond expectations. This is of course in part to their work ethic, but also down to the risk – the better their work, the better their reputation, which means more business. Without the competition and risk that comes from having to earn a contract, internal teams are at risk of becoming complacent – delivering “good enough” instead of over and above.

Cost

Both internal and external solutions can offer cost benefits, depending on the circumstances. In some cases, where there is a long term need for a specific role, it can be cost-effective to employ talent permanently rather than engage them on an agency basis. However, these cost benefits are lost if you hire additional talent for a specific project that requires time and resources now, but which will require reduced capacity in the future; you will literally continue to pay for those initially increased resource demands. On the other hand, many organisation leaders have horror stories of the contractors that cost a fortune and left a mess behind for the internal staff to clear up – or, worse, another agency to rectify at additional cost. It is true that, if not managed properly, external agencies can yield reduced value for money, and leave behind problems to be untangled in the future. However, when chosen well, an external agency can cost significantly less than hiring internal talent. And when you choose the right agency, not only do you only pay for what you need, but you have their resources – from copywriters to SEO experts, coders to designers – at your disposal.

Speed

Speed is another area that can be a benefit and a downfall of both internal and external agencies. While it is undisputed that a group of people working in the same building – or even office – are likely to get more work done, employed staff tend to operate under a more 9-5 ethos, which means that they tend to go home, regardless of whether the work is done. Agencies need to prove their worth at every turn, and are, therefore, more likely to work harder and longer to meet deadlines.