The people required for the project are:

• Senior technical writer.

• Graphic artist.

• Copy editor.

• Production specialist.

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

Function           Hourly Rate      Hours      Total

Sr. Tech Writer         75          560      42,000

Graphic Artist          75          150      11,250

Copy Editor             65           68       4,420

Production Specialist   65           36       2,340

Total for Project - $60,010

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

Employee vs. Outsourced     Annual Cost

Employee                       $430,779

Outsourced                     $180,030

Delta                          $250,749

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 re

Cost of Outsourcing on 14-Week Project

Function           Hourly Rate      Hours      Total

Sr. Tech Writer         75          560      42,000

Graphic Artist          75          150      11,250

Copy Editor             65           68       4,420

Production Specialist   65           36       2,340

Total for Project - $60,010

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

Employee vs. Outsourced     Annual Cost

Employee                       $430,779

Outsourced                     $180,030

Delta                          $250,749

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 re

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

Employee vs. Outsourced     Annual Cost

Employee                       $430,779

Outsourced                     $180,030

Delta                          $250,749

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)

Function             Total Hours    Percent of Time

Sr. Tech Writer           560            100%

Graphic Artist            150             26%

Copy Editor                68             12%

Production Specialist      36              6%

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

Employee vs. Contract Writer      Annual Cost

Employee Writer                      $135,671

Contract Writer                      $126,000

Delta                                $  9,671

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.

For example, when a company has one writer in-house full-time but also uses two contract writers, each of whom spends 50% to 75% of his or her time on that company’s work for the period of a year, it is probably time to bring in another staff writer (assuming that the work load is stable or growing). Contract writers can be used to fill in if the company is on a fast growth curve, until the need for another full-time writer is evident.

Outsourcing Scenarios: Beyond the Numbers

There are scenarios where cost alone is not the most important factor. For instance, a compelling reason to choose outsourcing rather than hiring is expertise. Occasionally, a company will develop a product that requires a writer with specialized knowledge and experience. The specialized writer (who can charge a premium for his or her expertise) is needed for the technical documents supporting that one product or product line, but the writer is not needed for the company’s mainstream product lines. In this insta