Should You Hire a Contractor?September 29th, 2014 | Articles, Hiring Resources | No Comments »
Freelance employment is no longer just for a small subset of the population. The tide has changed for the American workforce and 53 million Americans already participate in the contractor economy. As soon as 2020, that number may rise to 60 million freelance workers.
It’s a push that has been spurred onward since the start of the Great Recession and promises to have sweeping effects on the larger economy. Will your business benefit as freelancing becomes more normative?
A More Flexible Workforce
Chances are your projects widely differ. Some are optimized for permanent people who can handle prolonged treks into uncharted territory. Others benefit from a person who can land like a wildcat, chase down their quarry, and shortly move on.
Which situations are better suited for freelance employees?
- Short-term projects that involve a command of niche technology you’ll never need again.
- A buildup of multiple projects that can be whittled down by a hardworking contractor.
- A business-wide transition from old technical systems to an updated alternative.
In most of these scenarios, your project comes to completion and you won’t be scratching your head trying to find something for that person to do.
Reduced Hiring Costs
A permanent employee costs more than just their salary. Onboarding expenses, payroll taxes, training, and insurance can incur thousands of dollars in extra expenses. Add a few more employees to your roster and the bill exponentially rises.
Hire a freelance employee and you’ll have fewer expenses. If you use the services of a staffing firm, most of your HR, payroll, and benefits related expenses are covered. Alternatively, if you hire an independent contractor who is responsible for his or her individual payroll, this will cut down on your paperwork and liability.
Skipping Bad Hires, Job Hoppers, and Their Costs
Bad hires and job hoppers, the boogiemen of the hiring process, can make the prospect of hiring a permanent employee something to dread. If things go awry they can cost up to 30% of their salary as you are forced to seek, onboard, train, and insure a new employee.
Both leave their own type of baggage in their wake. Bad hires can hurt your business through productivity losses and office conflict. Job hoppers, though less detrimental, are gone so fast that any training or added investment seems as if it was money tossed into the wind.
With a freelance employee, there’s less of an investment. You might encounter the same type of conflicts with a contractor, but you can easily part ways without much of a hassle. No loss of training dollars. No unemployment pay. It’s a less complicated proposition.
Less Training is Required
Freelance employees are the plug and play option of the hiring world. Niche skills are their greatest appeal. From the moment they are hired, these contract professionals can spring into projects without preparation, training, or guidance.
The only caveat is not to get consumed in the search for the perfect person. Often, empty chairs remain open longer than necessary and that could cost a company $5,000 a month. When hiring freelancers, it’s important to search for certain skills while still keeping cultural compatibility in mind.
Avoiding Employee Burnout
Many employees benefit from this arrangement too. Some employees burn out as projects begin to feel repetitive. Then, their work begins to slip and their overall output takes a plunge.
A freelance employee can choose projects and move on to comparatively stimulating work after just a few months to a year. 50% of respondents to an employment survey even said freelancing provided more stable income. It’s a perfect fit for those looking to spice up their careers.
On a Final Note:
Freelance employees shouldn’t be used for every situation. They’re equipped to complete certain projects, but it’s better to bring on a full time employee for ongoing projects. Permanent employees are often more invested in your overall goals. They see their future with your team instead of as another notch on their portfolio.
And if an employee turns out to be a good long-term fit, it’s not hard to transition them into permanent employment.
by James Walsh