Why You Probably Shouldn’t Hire Outside Help

Financial advice, repeated often enough, tends to make its way into the common psyche of the financial community, and by osmosis, into popular belief.

This can be a dangerous process, and thankfully we have bloggers and the community as a whole to keep us in check and challenge the status quo.

One such belief has to do with hiring outside help. The common thinking goes something like this:

If the cost of getting someone else to do something for you is less than the income you could produce in that time period, then it makes financial sense to do it.

While this might make sense for many people, I’d like to poke a couple of big holes in this thinking. First and foremost,

We Get More Efficient

Unless you are completely arrogant and refuse to learn, the more you do something, the better you will get at it. The task will take less time to complete, and it will be done better each time.

Skills you learn doing one thing might help you learn something else much faster. For example, learning how to build a kitchen cabinet uses some of the same basic skills as replacing the patio deck.

With that understanding, think about how most of us who have gone through the exercise of considering help think about new tasks: we make the evaluation with the initial time cost in mind. And can you blame basic human instinct? That’s the only thing we know–that it will take 4 hours to figure out how to change the oil.

We forget that it will take 20 minutes if we actually get efficient at it…

We Assume Constant Production

The kind of analysis we’re talking about assumes that we will actually be making money while our service provider is doing whatever we were supposed to do. Does this work in practice? I’m not so convinced.

More likely, we use the free time as a mini-“vacation” to pursue something we like, or simply sit around on the couch and watch TV. I know I would–I’m not lying to myself.

We Can’t Always Produce More

Again, we assume if we have an additional hour to spare, whether by chance or by purchase, we’ll use that hour to produce income.

For many people, that might not simply be the case. We can’t always dictate our work schedules, or even choose to work overtime whenever we feel like it. Does this only work in the case of professional hourly workers, or freelancers?

And even if we can work more, are we calculating the true hourly rate we are producing (after overhead, travel time, etc.), or simply assuming the full rate?

There’s a lot of fuzzy math going on here!

An Exception?

If I sound like I’m throwing away the idea altogether, that’s not the case. One situation comes to mind where I would consider hiring help, but with the understanding of exactly what I was getting into, and no delusions about offsetting the cost with income.

That situation is simple: more time with family.

In other words, using money to literally buy time. If the money is there to support the decision, why not:

  • have someone do your laundry?
  • vacuum your house?
  • get groceries for dinner?
  • answer your emails? (think about how many bloggers have virtual assistants!!)

In return, you get more time to enjoy loved ones and to pursue personal hobbies and passions. But you actually have to do it!

What do you think?

I don’t mean to imply that this is a simple decision. The reasons I’ve talked about are just scratching the surface. So I’m curious to see what you think and expand on this:

  • How do you feel about the “traditional” approach to cost-value analysis for hiring outside help? What problems do you see with it?
  • Would you hire help, and for what reasons?
  • Do you currently hire help, and how has it worked out for you?
  • Does hiring help make you “forget” about the true value of hard work?

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33 thoughts on “Why You Probably Shouldn’t Hire Outside Help

  1. Interesting perspective, it got me thinking.

    The more I learn about investing, the more I want outside help. Yet, I don’t often go out and pay for it because I have a lack of trust in most of the traditional methods and the motivations of brokers.

    Also, for my business, there are certain skill sets that I just don’t have and don’t want to have, my mind does not think that way and that’s okay. Such as advanced software development, and I would much rather work with someone or pay someone to help me that is an expert. There are learned skills that take a lot of time to acquire, that are valuable to hire help for.
    .-= Ariel´s last post: Having a Clear Life Vision =-.

    1. Probably one of the most important qualities of leaders–hiring people that are much smarter than you to advise you, especially on things you have no idea how to operate! Great points.

  2. I think many of the holes you poke are on the money. I don’t mind the cost-value analysis, but I would add that cost and value do not relate only to money. Similar to your final point about time and family having value, I think it depends how important the money is to you relative to what you have to gain by spending it.

    I think a lot of us have areas where we are willing to put in the extra time and effort it takes to become efficient at doing something so we don’t have to pay for it. There are other areas where we are simply too far outside our skill set and must pay someone else to do it.

    For myself, I’ve spent a lot of time learning about personal finance and investing and I’m comfortable doing it on my own. As for changing the oil on my car? Oh my goodness. What a disaster that would be!
    .-= 2 Cents´s last post: 10 Reasons to Be Cautious Right Now =-.

    1. Yeah, same goes for us with changing the oil.

      To back up your first point though, a friend of mine would have to drive over an hour to the nearest repair shop to have his oil changed. So that’s like spending half the day at the shop PLUS the cost of having someone else do it…

      As you probably guessed, he changes his own oil.

  3. I’ve always been intrigued by the cost-value analysis largely because the assumptions you indicate (real hourly wage with commuting, costuming and destressing costs counted, and constant production).

    That being said, yes, I do employ someone to clean my home on a biweekly basis. For me, my reason is more health-value related, so the ideal of getting more efficient doesn’t actually work. The opposite tends to be true, in fact. Rather than have my home go to pot, I hire someone. The value that I get is that my home is well maintained (and someone could probably argue that feeds into the cost-value analysis), and that in turn reduces my stress which helps my health.

    Here’s the catch – just because I hire someone to clean my house does not mean that I do not have to work (or forget the true value of work). I work to maintain their deep cleaning inbetween sessions (or at not messing things up), and I work so that I can pay them for their service. I don’t give up working just because I hire someone to do specific chores in the home, I just focus my time and efforts elsewhere.

    1. Awesome analysis, Jennifer–and you make a very compelling argument about the value of work that I think makes a lot of sense.

      As 2 cents pointed out, it’s not only about money, but all the other side benefits you’re getting (health/stress-free environment, etc.). Thanks for commenting!

  4. An overlay to your analysis is age and lifestyle choices. As we were raising our family on a shoe string, I did as you suggested: remodeling the house, fixing what was broken, etc. And yes, I did learn how to become pretty proficient at it. But right now I am at a time in my life where, yes, I could do some of those projects, but I simply don’t want to expend the time and effort it would take. Have I become lazy? A little perhaps, but I would rather direct my energies at other challenges, so I often hire out some things I would have done myself years ago.

    The irony is that now I sometimes spend time helping my kids remodel their houses while I pay someone to work on my own. 🙂
    .-= Joe Plemon´s last post: Love and Money =-.

    1. That is pretty ironic! 🙂

      I think you’re right on the money with the age observation–we all go through stages in our lives, and our perspective on this topic changes. I mean…how many 20-year-olds do you see with housekeepers, chefs, and assistants?? I can dream, can’t I? 🙂

  5. I think many people would benefit from doing this kind of analysis. Why do we think that we need to outsource so many thing? I only outsource very specific tasks and only if I have the financial means to do so easily. My favorite is lawn care. My guy does the job in less than one hour which would take me at least two hours. He also prices this service cheaply enough. Now, when it comes down to doing extra work in the garden (planting, mulching, spring clean-up, etc.) that does not need to be done on a regular basis, I rather do it myself and save the money. Besides, I also enjoy garden work especially when my little boys “help” me.

    1. That’s the one thing that’s also true with me and an additional layer to this whole thing–I enjoy doing housework and it gives me a sense of accomplishment and ownership of my assets.

      This is one of the primary reasons IKEA has been so successful as a company–people who put furniture together at home, rather than getting it ready-made, have a stronger emotional investment in that piece of furniture. It’s certainly true in my own life. I talk about IKEA all day long to my friends. 🙂

  6. The topic you raised here is intriguing. It can probably be expanded to book length.
    One way to view this is to break up the time interval involved. For example, when I needed a logo, I found Pete, our fellow tweep at http://www.logosforwebsites.com/ who was able to produce a great one, far faster than the time I’d have to spend trying to make my own. I may need a few logos over my lifetime, why learn graphics when I can hire Pete?
    The same for certain changes to my web site. Mrs Micah at http://blogcrafted.com/ was able to do what I needed. Again, a once in a blue moon need.
    Then there are the weekly type items, such as lawn mowing. Not going near that. All outside stuff gets subbed out.
    Inside the house, I’d rather do electrical or small plumbing repairs myself, if only not to wait half the day for a guy to show up.
    I am also finishing my basement myself. It’s turned into a 10 year project. In the end, I’ll have saved a lot of money, and it will be exactly the way I’d like, but if I could go back 10 years, I should have hired guys to come in and just pay the bill. I could have enjoyed the space all this time.

    1. Awesome suggestions (I have seen Pete’s work everywhere!!). I’ve found the same is true in my own life, especially for things where I lack the talent (like high-end graphics).

      Even though I was able to create everything you see on this site today myself, I am still getting help with the *next* generation of Fiscal Fizzle.

  7. I think it boils down to life is short and you only have a fixed amount of time so ideally you’d spend it doing what helps you reach your life goals.

    Of course money is a big part of it, we can’t afford to outsource everything. It seems to make the most sense when you hire a specialist to do a task correctly, something that that would take you a very long time and might not be done well.

    Another good case is if you can hire a person or company to do something that needs to be done and then you spend the time you save on a different activity that makes you more than you’re paying the people you hire.
    .-= Ben´s last post: Turbo Tax Free Trial! =-.

    1. The “might not be done well” part is something that scares me when it comes to things like car maintenance, and most home maintenance, too. I am not really trained to spot problems before they happen, unlike someone who may have seen an early symptom 1,000 times before.

  8. Yep, that’s why I don’t outsource a lot of things related to my blog. I don’t think I’m at the productive level where that’s going to make a diff in income. Also, I’m a control-freak. 🙂

    As someone who gets people to hire her to work on their blogs, I have an observation on the three kinds of people that normally hire me. 1) Some people hire me to teach them how to do stuff, which I normally enjoy doing (if the person’s got reasonable learning skills). 2) Other people hire me to do 1-time jobs that would take them a long time to learn and wouldn’t have long-term payoff (moving from host to host, happens less than once a year). Or big projects they want done right & don’t want to stress about. 3) And others have found they have no learning abilities for certain things–especially older people who are great writers but have no interest in or aptitude for managing websites. The third group normally takes me on as a long-term site manager.

    I think all of those are good reasons and enjoy doing it. But I agree that as a rule we’re kidding ourselves if we think saving time = making money. Gotta audit your time first, then decide.
    .-= Mrs. Micah´s last post: File Your 2009 Federal Taxes for Free =-.

    1. Thanks for your insights–in one area of life or another, I can place myself squarely in each of those three groups.

  9. Sometimes for your long-term mental sanity, it makes sense to hire help. If you hate doing the books, for instance, your small business could be destroyed by trying to be an accountant as well as a CEO.

    But I agree in general it’s a good idea to work out the true post-tax dollar cost of hiring.

    1. Great example, since many people are not adept to naturally doing both! (Although more and more entrepreneurs are finding or creating the tools that help them overcome that inability–for example, the latest generation on simple online accounting tools).

      Thanks for joining the conversation!

  10. Great debate! I’ve been one of those people who insisted on doing everything themselves, and I get great satisfaction from solving problems on my own. The problem is I’m running into situations more and more often where I have schedule conflicts and time constraints. I still do most things myself but I’m seriously questioning my rationale, especially when it comes to deciding between doing something to get ahead at work and advance my career and routine things around the house (especially the things I hate, like painting, drywall, installing flooring, etc.).

    On the other hand, I have friends and acquaintances who outsource things like housekeeping so they can have time to do more personal activities (like driving their kids from city to city for a traveling soccer league, for example).

    I think the best thing to do is find a balance between your work life and you personal life; spend too much time on your personal life and your career suffers and too much time on your career and your personal life suffers. I’m going to start doing a mental cost benefit analysis before I decide to attempt something myself or have someone help me.
    .-= David @ MBA briefs´s last post: Do positions of power corrupt people or attract people who are already corrupt? =-.

    1. Thanks for sharing your experience! I agree–like for so many things in personal finance (and life), balance is probably the best solution.

  11. I’m so glad you wrote this. This is probably one of the top five dumbest concepts promoted by the “financially savvy.” The argument is completely irrational to me, because most people never use the time they save to make money. It’s one thing when you grossly lack the skills and expertise to do something. It’s quite another when you’re just lazy and dead broke.

    It used to take me 6-8 hours to style my hair. I’m guessing it would’ve cost about $80 for someone else to do it for me. One of my friends always told me to just go to a hair stylist. She said they’d take less time and do a better job. Thus, I’d receive superior service and spend less money by letting someone else do my hair.

    As a working professional, 6-8 hours of my time is worth more than $80. However, I wouldn’t have been able to work whether I styled my hair or someone else did.

    Furthermore, people who specialize in styling natural, black (African) don’t live anywhere near me. The commute would add an hour to an hour and a half to the overall time.

    Plus, I’d have to wait until the stylist finished up with the previous customer. I’ve waited upwards of 4 hours before being seen by a stylist.

    Oh, and I can’t forget that my experience hasn’t always been the best with hair stylists. I’m almost confident I do a better job styling my own hair. At least at this point. Because of the texture of my hair (nappy), I wouldn’t trust someone else to comb it. I’ll do it myself, thank you.
    .-= Shawanda @ You Have More Than You Think´s last post: How NOT to Lose Your FSA Money =-.

    1. Hey Shawanda, thanks for the awesome case study! It’s amazing that you could wait almost 4 hours to see someone; I would not have the patience!!

  12. Remember, too…Doing household chores can actually qualify as “Spending Time w/the Kids.” Especially when they’re older, vacuuming, raking, and cooking WITH the kids has many benefits, including:
    1) You can pay them (allowance), instead of a paying a professional – Teaching them money management, and using money you’d probably spend anyway on their requests for toys and such. (This especially works when you DON’T do chores together.)
    2) They learn to do things like cook and clean – Making them very capable adults, right out of the box.
    3) You’ll fight less with them if you’re doing chores together than if you’re “making” them do chores alone.

    Mostly I pay my kids a substantial allowance to do the chores without me (less than I’d pay a professional). I pay them a BONUS if they do them without me having to remind them all week ($8/wk + $2 bonus).

    But, I find that when we do them together, we bond and have fun.

    1. Yet another layer to consider, Venus! I agree–I think we’ll take a similar approach with our kids, especially since I actually enjoy cleaning.

  13. I think it really depends on what it is and you do have to chose wisely. I could have used someone to help clean my home when I was sick last spring (MS). All the focus was on me and a lot of things fell by the wayside. Trying to “do it all” is not good either.

    When it comes to business, I do what I can in a reasonable amount of time and hire other people do to the rest. I do my own bookkeeping, website updates, light HTML/CSS, etc, but when it comes to anything that’s more dynamic like filing taxes (especially LLC, between two states, sales taxes, tons of 1099s and a couple of w-2s) I’m not going to risk getting audited because I screwed up. Less stress and headaches for me. I dont need to add more drama to my life!

    You need to find where your balance is – at least I do.

    1. Chalk up another one for good balance! 🙂 You also made an excellent point about having to adjust with the times–our life situations change and what may not be warranted now could become a necessity tomorrow!

  14. A good list of assumptions we tend to make to justify our outsourcing. The second one seems especially odd; unless whatever work we are outsourcing must be done in the middle of the work day, the chance that saving an hour or two of time will allow us to work an additional hour or two at our normal rate of pay is minimal.

    I do think there are situations where outsourcing can make sense, most of which have been touched on here; when you need professional level skills and don’t have the time to develop them yourself, when it’s a one time task and learning how to do it yourself is hard to justify, or when you simply hate doing the task enough to pay for the privilege of not having to do it yourself. But to try to justify it by saying, ‘I earn fifteen dollars an hour, it would take an hour to mow my yard, therefore, it’s a good deal to get a neighbor kid to do it for ten dollars’, that’s just absurd.
    .-= The Amateur Financier´s last post: Financial Samurai’s Alexa Challenge =-.

  15. I go through a series of questions.
    1. Am I wasting time? If so, paying someone is like throwing away money.
    2. Is this out of my reach? Do I know someone who would teach me?
    3. If I need to pay, research the quality of labor and the market price. I was very sick and needed a “nanny” a few hours a day. We found college students who were looking for a little extra work to fit their schedule. We paid better, because we didn’t want them to go looking for another job while I’m unable to leave bed.

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