Are you using Upwork (formerly known as Odesk) for your business?

If you’re a small-time entrepreneur, then you’ve likely used or are using this platform. The variety of tasks you can hire freelancers to do is endless and it offers some great benefits - like tax liability exemption and payroll handling.

I’ve used it myself and have been able to find people who reliably perform very specific tasks for me on a recurring basis. For example, I outsource my flight videos to a guy on the other side of the world; he cuts my footage, adds effects and sends it back over.

Although, “Specific tasks” is the key term here.

I’ve come across a few businesses who use Upwork continuously, for most of their job openings. While that isn’t inherently a bad thing, it can impede the long-term company growth.

The reason is that when you outsource remotely through a platform like Upwork, you lose the ability to build and retain tacit knowledge within your organization. Upwork is great for finding a developer here or a graphic designer there. But, if the work calls for any extent of collaboration among your team members, this method can bring about headaches. Getting a team of people who are scattered around the world to collaborate can be frustrating - for you and for them. Now while there are many companies who have successfully built remote companies, there are still many who haven’t.

Having a team share an office can profoundly impact productivity. Move your developer, designer, customer service reps, data researcher and others into one office, and they’ll share a ton of knowledge among themselves. As a result, you’ll see their overall productivity will rise to a level not achievable with remote workers.

Because the training isn’t being passed on from worker to worker when you outsource remotely, the training process can be time-consuming at best and wasteful at worst. You might teach a lead prospector a very specific process, but all his knowledge and experience is lost as soon as he is gone. To overcome this loss of knowledge requires extensive documentation of each job that is continuously updated as the job evolves.

While it’s not impossible to find a long-term and reliable contractor, many work for multiple clients and will leave you the instant they get a full-time job offer. Plus, most Upwork contractors don’t take the work they do for you as seriously as they would for a full-time employer.

An alternative to hiring freelancers on Upwork is to build a team of contractors or employees that work directly with you. If the appeal of Upwork is lower rates, you might consider taking the work to a country like the Philippines, where the cost to employ somebody full-time would equal the cost of a part-time contractor in the US.

In addition, building a dedicated team of remote workers within the same environment allows you to conduct regular meetings, and allows them to communicate effectively in a shared office space.

If you have a specific task you’re looking to outsource, Upwork may very well be the best option out there as they offer some attractive perks and flexibility. But, if you’re a growing business that needs to outsource entire departments, you might want to step away from remote outsourcing and build yourself a team of people who will interact regularly, share knowledge and are dedicated exclusively to your company.