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To Employ or Not to Employ?

Greater Boston Homes (GBH) is a moderately sized company that does home construction in and around Boston. Although the organization was not terribly creative when coming up with a name, it has been quite successful in developing a market niche for itself by providing a user-friendly experience in the process of design and construction for its customers. GBH is known for its distinctive style of futuristic, neocolonial homes. To maintain a brand image and consistently high quality, the company has used full-time employees to perform most of the work, contracting out only those tasks that are more peripheral to the look and feel of the finished homes. This makes it an exception in the industry.

When it comes to creating software for applicant tracking, however, GBH is behind the curve. Its systems for evaluating recruiting and selection processes are cumbersome, out of date, and not well integrated with compensation, budgeting, and accounting. GBH already has a full-time staffing manager (Sophie Wang) as part of its HR function. Ms. Wang is highly skilled in using all the major software platforms available in the market. In addition to maintaining and analyzing all records related to staffing, she also oversees the recruiting and selection process for the entire organization, so there is no spare time in her schedule to also design a new applicant tracking system.

The company is hoping to have an independent contractor perform the work. After the system is set up, the day-to-day management could be handed off to Ms. Wang. GBH prefers to have the work done in its own offices so that it can track progress on the project and change specifications as needed throughout the process. However, it has also considered having an employee do the work. Given the current growth of the organization and its demand for top-quality analytics, it could reassign Ms. Wang to a purely technology management role in designing the system. It is within her capability. If she did take over the role, GBH could hire a less skilled full-time employee to do the more administrative and direct-contact side of recruiting. Other technology management roles in the organization may open up in the future, so there might be a need for Ms. Wang’s skills in these other areas if she received sufficient development.

After costing out the process, the company believes that the costs of adding a full-time employee may be somewhat greater in the short run, but all of the other factors described above suggest there may be long-term advantages to keeping development in-house.

1. What would be the advantage of having an independent contractor perform this job?