When to Outsource, Delegate or Hire in Your Small Business: Systems Before Staff

Oct 9

8 min read

Key takeaways

Knowing when to outsource, delegate or hire starts with systems. If a task isn't written down step by step, handing it to a person or an AI tool will go wrong.
The order is automate, delegate, then hire. Hiring comes last, not first.
Start by listing everything you do, then sort it into what you hate, what you don't mind and what's in your zone of genius.
Hiring should be a financial decision before it's a workload decision. Desperate hiring skips the steps that matter.
Hire for values and attitude first, skills second, and give people responsibility rather than tasks.

Kate De Jong and Sam Morris with headphones on

Sam started her week feeling unproductive. She was busy, but she wasn't getting through the work. The problem wasn't effort. The steps inside her tasks were too vague to follow, even for her. And if you're wondering when to outsource, delegate or hire, that's exactly where the answer starts.

So she opened the Claude extension in Chrome beside her Google Tasks, asked it to review what she was doing and which tools suited each task, and let it build out detailed processes.

And I sat there and watched the magic happen while I played with my phone. — Sam Morris

That moment sums up this episode. Before you can hand anything to a person or a tool, you need to know exactly what you're handing over. Systems come before staff.

We're Kate and Sam, hosts of the Thriving Business Podcast. Kate's a PhD engineer turned business strategist, and Sam's a Navy veteran who's spent 20 years in business working out what makes businesses tick and what makes them stall. This was the final episode of Quadrant 2 of our Thriving Business Wheel: Keep More, all about profitable operations.

Why do you need systems before you delegate?

Because you can't hand over something you haven't defined.

You need systems first because a person or an AI tool can only follow the steps you give them. If the steps live in your head, they'll miss the bits you didn't know you were doing.

You cannot delegate chaos. — Dr Kate De Jong

Sam put her finger on why this trips up so many of us. When you've done a job a hundred times, you stop noticing the small decisions inside it.

We do so much from muscle memory that we don't see the steps anymore. So when we write instructions for someone else, we skip the nuances. They follow the instructions, it doesn't work, and we decide they're the problem. Michael Gerber made this point decades ago in The E-Myth Revisited (1995): a business should run on repeatable systems so ordinary people can get consistent results, rather than relying on one brilliant person who carries it all in their head.

What's changed is how fast you can build those systems now. Sam used AI to question her own processes, fill the gaps and turn loose task lists into proper steps. If you haven't set up your AI tools yet, our AI Setup Workbook walks you through it.

What should you outsource first?

Start with a list, not a job ad.

Outsource the tasks that drain you and that someone else (or something else) can do well, and keep the work only you can do. You find out which is which by writing it all down first.

The first step in this whole process is to take the time to sit down and make a list of everything that you do. — Sam Morris

Then sort the list. Sam groups tasks into three buckets: the things you hate and aren't naturally good at, the things you don't mind doing, and the things in your zone of genius.

The phrase comes from Gay Hendricks' The Big Leap (2009), which describes four zones: incompetence, competence, excellence and genius. Your zone of genius is where your natural talent and your enjoyment meet. We've written before about the trap of staying in the zone of excellence, the work you're good at but that drains you, in Good at It but Drained by It?.

There's one area Sam's firm about: revenue generation should sit solely with the business owner. That doesn't mean you do every sales task yourself. It means the responsibility for bringing money in stays with you. Once your list is sorted, you can brainstorm it with your AI tool and work out what a machine can handle, what needs a human, and what stays with you.

When to outsource, delegate or hire: what's the right order?

Automate, delegate, hire. In that order.

Automate first, delegate second and hire last. Each step costs more and carries more risk than the one before, so you only move to the next when the cheaper option can't do the job.

This is where many of us get it backwards. We feel swamped, so we jump straight to hiring. But a new person walking into an undocumented business inherits the chaos, and you spend your time answering questions instead of doing your best work.

AI has changed the first step a lot. In the episode we talked about how much admin used to go to a virtual assistant that a well-set-up AI tool can now take on. That doesn't replace people. It means when you do bring someone in, they're doing work that needs a human.

How do you know you're ready to hire staff?

Check the numbers before you check your stress levels.

You're ready to hire when the business can afford the role and you've got the systems for someone to step into. Feeling overwhelmed on its own isn't a sign you're ready.

The first thing is that that should be a financial decision before it is a I'm desperate, I have too much work decision. — Sam Morris

Sam's seen what happens when desperation drives it. You rush, you skip steps, and you end up with the wrong person. That's why we like the old line hire slow, fire fast: take your time getting it right, and act quickly when it's clearly not working.

The cost of getting it wrong is real. In Who: The A Method for Hiring (2008), Geoff Smart and Randy Street estimate that the average hiring mistake costs 15 times the person's base salary once you count hard costs and lost productivity. Even if your numbers are smaller, the time and energy you lose to a bad hire comes straight out of your capacity to grow.

Should you hire for skills or values?

Skills can be taught. Attitude mostly can't.

Hire for values and attitude first, then check the skills. Someone who shares how you work will learn the tasks, and someone who can do the tasks but doesn't share your values will wear you down.

Skills can be learned, but it's the attitude and the emotional intelligence that someone brings that is more important. — Dr Kate De Jong

If you want to dig into emotional intelligence, we unpack it in How to Develop Emotional Intelligence as a Leader. And if you haven't pinned down your own values yet, How to Write Business Values That Actually Drive Decisions is a good place to start, because you can't hire for values you haven't named.

Sam had another warning for anyone building a team.

Her advice: try not to hire a carbon copy of you. The whole point of bringing someone in is a fresh set of eyes. Kate suggested personality profiling tools as a way to find people who think differently from you. Sam thinks of a team as a jigsaw puzzle. You're one piece, and you need all the different pieces to make it complete.

Smart and Street's approach in Who backs this up. They suggest writing a scorecard for every role before you advertise it: the mission of the role, the outcomes you expect, and the competencies (including cultural fit) the person needs. Sam also drew on a framework she'd seen from Layla Hormozi, five C's for bringing people into a business: compliance, clarity, culture, connection and checkback. Clarity, for her, includes a clear job description and 30, 60 and 90-day goals.

How do you write a job ad that attracts the right people?

Write for the person, then list the skills.

Lead your ad with the kind of person you're looking for, then list the skills. The right people will recognise themselves, and the wrong ones will scroll past.

Sam uses AI to help draft her ads, but she always starts by describing the person first. Then she adds what she calls an Easter egg: a keyword at the very end of the ad that applicants have to use in their cover letter.

Because one of the things I'm looking for in a candidate is attention to detail. — Sam Morris

Anyone who sends a generic, copy-paste application doesn't include the word, and you can filter those out in seconds. In her most recent round of hiring on Seek, Sam saw plenty of applications that clearly hadn't read the ad at all, which made the filter worth its weight.

How do you keep good people once you've hired them?

Hand over ownership, not a to-do list.

Give people real responsibility, some room to improve how things are done, and a picture of where they could go with you. People who feel ownership tend to stay.

And give the person the responsibility and not the task. — Sam Morris

Kate's seen this from the inside. She once worked at an employee-owned engineering firm where becoming a shareholder was the goal everyone worked towards. Staff thought of themselves as business builders, not just employees, and that shaped how they showed up.

You don't need a share scheme to borrow the idea. A long-term vision for someone's role, and a clear sense that their work matters, goes a long way.

What if managing people isn't your thing?

Be honest with yourself before you build a team.

Then build a business model that doesn't depend on a big team. Managing people is a skill and a preference, and it's fine if it isn't in your zone of genius.

Kate was candid about this. She doesn't enjoy the timesheets, leave requests and day-to-day people side of running a team, and it's part of why she chose the business model she has. Some businesses need staff to grow. Others can grow through systems, AI and a few trusted contractors. Knowing which one suits you saves a lot of pain.

Frequently Asked Questions

When should a small business owner start delegating?

Start delegating once a task is documented clearly enough that someone else could do it without asking you. Before that, put your effort into writing the process down. You cannot delegate chaos.

Should I hire a VA or use AI?

Try AI first for repeatable admin, writing and research tasks. Hire a person when a task needs judgement, relationships or a human touch that a tool can't give. The order we use is automate, delegate, then hire.

What's the biggest mistake people make when hiring their first staff member?

Hiring out of desperation. When you're swamped, you rush the process and skip the steps that protect you. Treat hiring as a financial decision first, and hire slow.

What is a zone of genius?

It's a term from Gay Hendricks' book The Big Leap. It describes the work where your natural talent and your enjoyment meet. The aim is to spend more of your time there and hand off the rest.

What can you do this week?

Three small steps to get your systems in order.

Write down everything you did in the last week. Sort each task into hate, don't mind, or zone of genius.
Pick one task from the hate pile and write out every step, including the bits you do on autopilot. Ask your AI tool what's missing.
Before you advertise any role, check the numbers. Can the business afford it, and is there a system for the person to step into?

I like to think of the team as a jigsaw puzzle. — Sam Morris

Ep #9 | Systems Before Staff: The Smart Way to Outsource, Delegate and Hire cover art

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