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Outsourcing Design and keeping jobs in Ireland

VanessaOutsider

I am co-director of a small publishing company and we currently outsource all our design. We are very happy with the service and it is priced very well.

We are currently debating about moving our design in house. This outsourced design costs us about 16K per year and it would take 1 capable person 6 months to do it.

There are a few reasons to change:
It would be good to keep that money in Ireland as already about 60% of our revenue comes from outside Ireland.

We could use the designer as a web developer too and get more business it on the back of that and thus grow the business.

Does any one know if there are grants to help make up the shortfall in our potential new person's salary?

Anyone got any opinions??

Vanessa

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jerryob

Vanessa,
Some points to consider...

1) How much of the work that your new hire would could be classed as R&D? From the Revenue perspective, the definition of R&D is fairly broad. Why do I ask? Revenue gives you a credit back against your corporation tax for 25% of eligible incremental R&D expenses incurred in the company, with 2003 used as the base year. If you are making a loss, i.e. not paying corp tax, then you can carry this credit forward to set against future profits.

2) For a company incorporated between 14th Oct 2008 (last budget day) and 31st Dec 2009, this R&D credit is now refunded to you as a cash payment if you are loss making, up to a cap of €40k (€320k loss * 12.5% tax rate). This makes a big difference to cash flow, especially for startups in loss-making development mode.

3) I'm guessing that you were incorporated before 14th Oct 08..... I have heard that you may still be eligible if you create a subsidiary (by end of year) and transfer operations into this. Health warning: I'm not an accountant, so I would get advice on this first.

4) When claiming the cash-back allowance, there is a 10% rule. That is, the company cannot outsource more than 10% od R&D AND the company to which this portion of R&D is outsourced cannot claim the cash-back on it - no double counting...

5) Not sure if this is applicable, but have a look at Financial Support for Key Hires from EI. Do the enterprise boards have an equivalent?

Darragh29

VanessaOutsider wrote: »

I am co-director of a small publishing company and we currently outsource all our design. We are very happy with the service and it is priced very well.

We are currently debating about moving our design in house. This outsourced design costs us about 16K per year and it would take 1 capable person 6 months to do it.

There are a few reasons to change:
It would be good to keep that money in Ireland as already about 60% of our revenue comes from outside Ireland.

We could use the designer as a web developer too and get more business it on the back of that and thus grow the business.

Does any one know if there are grants to help make up the shortfall in our potential new person's salary?

Anyone got any opinions??

Vanessa

I've a good friend who has around 7 years solid graphic design experience who has just been made redundant from her job, she also has a degree in graphic design and is looking for freelance work or a job in design if she can get one. Let me know if you're hiring!

heggie

VanessaOutsider wrote: »

We could use the designer as a web developer too and get more business it on the back of that and thus grow the business.

We see jobs like this all the time, and it shouts out inexperience. A graphic design and web developer are completely different skillsets, they are not the same job. You may not even be able to find a graphic designer & web designer/front end designer for the sort of money you're offering.

If you look for a designer who is also a developer, chances are they will be mediocre at best.

You will probably get more value hiring one or two good freelancers.

VanessaOutsider

We had a really good guy in the previous company I worked for before setting up on my own. Great web design, super quick with simple web dev and uploading and simple editing of web videos and pretty good at print design. Just out of college too. I guess he was the Holy Grail.

As I said the company we outsource to in South America are superb and very good value and no complaints after 18 months We are just exploring the options of bringing it back in house as we have all the kit and the software just sitting there.

Surely the government have some incentives for small business to keep the money in Ireland and give jobs to Irish people??? Seems daft if its not there and easy to access...

Thank you so much everyone for all your advice

Vanessa

heggie

Not sure about any incentives, but it would be worth checking out one or two freelancers, or a small agency to see if they could help you.

At the end of the day, hiring somebody you will need to pay them a salary (which for what's involved won't come too cheap)

Another option would be to hire a freelancer to work on print design on site for a couple of days during the week, and maybe outsource the web stuff to a web company? unless you have very regular web work, I don't see the sense in having an in-house web designer or developer.

experiMental

VanessaOutsider wrote: »

I am co-director of a small publishing company and we currently outsource all our design. We are very happy with the service and it is priced very well.

We are currently debating about moving our design in house. This outsourced design costs us about 16K per year and it would take 1 capable person 6 months to do it.

There are a few reasons to change:
It would be good to keep that money in Ireland as already about 60% of our revenue comes from outside Ireland.

We could use the designer as a web developer too and get more business it on the back of that and thus grow the business.

Does any one know if there are grants to help make up the shortfall in our potential new person's salary?

Anyone got any opinions??

Vanessa

What are your design requirements?

One thing you can do is outsource design to students in colleges, arrange multi-disciplinary teams there, liaise with various colleges about this. I guarantee you that it will be more cheaper for you and more sustainable in the long term.

antoinolachtnai

It sounds like you are talking about artworking. Artworking is not design.

If it really is design, and you are really happy with what you are getting, you should certainly not move.

If you take on an artworker, you have to think about what sort of career prospects and progression you can offer.

An artworker is unlikely to be a fully-fledged web developer. They might be, but it is unlikely enough.

You might be able to find a person locally who can do what you need on a part-time basis and this might be the best way forward if you want to keep things local.

The government can't really be seen to incentivise you to take a job off a worker in another EU state.