There comes a time in every successful business when there’s just too much work for one solopreneur. That’s a good thing – it means your business is growing. But if your work day is longer than 24 hours, it might be time to find some help.
When it’s time to start hiring, should you look for a full-time employee or an independent contractor? There are lots of benefits to hiring either type of worker, but one or the other may be a better option for your small biz.
Stay tuned – here are the factors you should consider to help you decide between an employee and a contractor.
1. Nature of The Work
There are some types of work that lend themselves incredibly well to contracting, and others... not so much. Work that involves information that’s confidential or sensitive might be better done by an employee of the company.
Certain industries are more apt to have a large base of contractors to choose from, too. For example, you won’t have trouble finding a freelancer to do your books, write awesome content, or design your website. Because these types of work tend to be more oriented to separate, distinct projects, it’s easy to hire a contractor for each individual project.
2. Breadth of The Work
One of the first things to consider is the breadth of the work you need done. Part of this is the length – how long will the work take? Is it just one project or many? If the answer is a few months or longer – or many projects – you might be better off hiring an employee. For projects that will take a month or less, a contractor could be a good option.
Another facet of the work to consider is intricacy. How much control over the details do you need to have? Does the work require intricate knowledge of your company, customers, or industry? The more intricate the work is, the better off you’ll be with a full-time employee.
3. Diversity of Your Needs
You also need to consider your needs and how they vary – does the work you need done cross occupational lines? You might need a little bit of accounting, someone to answer the phones, and the occasional website redesign. It’s unlikely you’ll find someone who specializes in all of these things, but you don’t need to hire 3 separate employees.
In this case, it makes more sense to contract with 3 different freelancers. Each can do a little bit of work in their area of expertise, and it’ll cost you about the same as hiring one full-time employee.
Your budget will also affect which option is better for your business. With a full-time employee, you’ll have to worry about providing benefits, being locked into a yearly salary, and paying additional payroll taxes.
On the other hand, a freelancer may come at a higher cost for the actual work. This has to do with the employment uncertainty and the fact that a contractor likely has to pay for his or her own insurance and other benefits.
Another important factor is seasonality. Are you crazy busy right now, but expect things to slow down next quarter? If you don’t anticipate needing help throughout the year, it’s probably best to go with a contractor or freelancer.
Hiring seasonal, part-time work will help you save money during slower months because you won’t be tied down to the yearly salary of an employee. This opens up more budget to hire multiple freelancers if you need to during the crazier times.
Hiring an employee versus a contractor also entails different levels of investment on your part. Generally, the process of hiring an employee is more resource-intensive – including the time, money, and effort required for recruiting, training, and ongoing management.
Because a contractor is a temporary worker, you’ll have less investment in the individual worker. That means you can save time and money – and if things don’t work out with one contractor, it’s easier to cut ties and find someone new.
Pros & Cons to Both
By now, you should have a pretty good idea of which type of worker will be best for your business. Whether you decide to hire a contractor, full-time employee, or a few of each, you'll be enabling higher growth for your business and less stress for yourself. So get ready to slide some work off of your plate and discover a little extra you time.
Which type of worker will you go with? Let us know how it turns out!