Yeah Ive been stuck with this in my own business, I don't really want inhouse employees due to all the admin and higher cost that it involves, not to mention that people steal ideas (website design and marketing).
You can bind them with trade restriction contracts but i've seen people get out of those with ease after leaving a company. However advantage is you have control over the employees work can take a hands on approach.

I had an employee once and it was a nightmare, I thought it would lighten my work but do you know how much management goes into having a "staff member" even with procedures in place. To be fair this person was pretty good and I came to realize that maybe i lack management skills ( another point to consider )

This is not really why I commented on this, played around with outsourcing and my biggest problem in not getting work done on time because we set incentives its quality that's the main issue. Remember you are hiring these guys cheap so they are probably employed by a bunch of other people and thus they churn and burn work.

I was advised by a mentor that it doesn't really matter who or how you hire somebody they are not going to look after your business the way you do. So what we do now is give out simpler less important projects to those guys ones that I can afford to lose. The important jobs or jobs with potential for ongoing growth stay with us.