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In these days of restricted head count and tight budgets, the question of whether to outsource or hire in-house staff is more critical than ever. The technical publications function, however vital, is undergoing more scrutiny and also facing greater challenges than ever before. Companies that already employ an in-house technical publications department are looking at doing more with fewer resources. Start-ups, with no internal technical publications staff, are struggling with how to develop technical documents in the most cost-effective way. This article examines the pros and cons of entrusting all or part of the technical publications function to outside vendors. By examining a typical project, I will analyze costs and also answer questions about when to staff which functions internally. Numbers Speak for Themselves For both start-up and mature companies, the basic questions are: When do you outsource your technical publications, and when do you staff technical publications internally? There are no quick answers to these questions, because there are several factors to consider. The easy part of the answer is straightforward number crunching. The more difficult part of the answer depends on how large your company is, the nature of your products/technologies, and how you operate internally. I can't provide all the answers for your specific company. However, drawing on my 19 years of experience in managing the technical documentation function, this article provides a framework for analysis and decision-making vis-à-vis outsourcing and/or staffing the various functions vital to technical publications. Let's take the easy part of the equation first by examining a typical case: Company X requires a new documentation set for a complex piece of equipment, say a new line of network routers. The associated document has the following requirements:
The people required for the project are:
If these people are employees, the cost of using them includes salary, benefits and other overhead. (Figures used are based on San Francisco Bay Area salaries, benefits and overhead. National averages will be lower.) If the same functions are outsourced for this project, the costs are not burdened by benefits and overhead. (The costs used for contract workers in this analysis are averages, derived from a range of typical costs for each function. The actual cost in any specific instance will vary.) Cost of Outsourcing on 14-Week Project
The savings in this scenario is $55,969 when the work is outsourced. If you're just looking at 14 week's worth of work, the monetary analysis is compellingly in favor of outsourcing. But of course, most companies have more than 14 weeks worth of technical documentation work. On average, a typical company has two or three releases of a product, resulting in two or three projects (of approximately 14 weeks duration) per year. Over a year's time, then, let's assume a company has three technical documentation projects that last about 14 weeks each (for a total of 42 weeks). Using the same figures as above, let's look at the annual cost of using outsourced labor vs. in-house employees. The table below provides the data. Annual Cost of Outsourcing vs. Employee
The reason for the rather eye-popping savings of $250,749 is that contractors go away between jobs, and employees don't. A good rule of thumb is: If you have 42 (or more) consecutive weeks of work, in-house staffing is economically feasible. If your work flow comes in bursts of activity, followed by weeks or months of low activity, outsourcing remains the best solution. Which Functions Should Be Staffed First? Even if you have a fairly steady flow of technical publications work, there remains another decision: Which functions are best staffed in-house, and which are best outsourced? Looking at the sample 14-week project, the percent of time each function is required during that 14-week period is presented in the chart below. Percent of Time Required During 14-Week Project (560 Hours)
Clearly, the writer is the first function to staff internally, the graphic artist is a distant second, and the copy editor is third. It is unclear whether most companies ever benefit from staffing production specialists internally, because so little of their time is required on any given project. Now let's examine the annual cost of an employee writer vs. a contract writer, using the previous scenario. The contract writer will be working for 42 weeks (three 14-week projects), and the employee will be working for 52 weeks. (Remember, the figures we're using here for the employee are fully loaded with benefits and overhead.) The chart below shows how the figures add up. Annual Cost of Employee vs. Contract Writer
So at 42 weeks of continuous work, the cost of hiring a writer becomes somewhat comparable to the cost of using a contract writer, assuming our sample scenario is typical. You should be absolutely sure that you have that critical 42 weeks of work lined up, though. If you hire a writer internally and the work flow falls significantly short of that break point, it can be very expensive. It is my experience that very large companies can support 300-plus technical writers, with a ratio of five or six artists and one editor to every 10 to 15 writers. Production work is often contracted out, even in the largest of firms. In companies where the flow of technical publications work is sporadic, the decision of whether to staff internally or to outsource is a bit more difficult. All too often, an erratic publication cycle keeps one or two writers busy with work enough for three or four writers––but only for a few months at a time. Between cycles, the employee writers have little to do and find themselves assigned to product teams doing busywork. The best solution is to determine the minimum staffing required to meet the company's average needs, then fill in during peak times with outsourcing. Careful analysis of how that outsourced time is deployed, and by which functions, will help you determine when to hire additional staff. |
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