Whether you are planning to launch your own startup or running an established business, managing everything on your own seems a herculean task. It’s always a good idea to get some extra help to get the workload off your shoulders and perhaps it also enables you to tackle problems beyond your skill set. The biggest choice when hiring professionals for your business are freelancer or employee?
While the industry has been traditionally slightly more skewed towards hiring full-time employment force, the growing trend of freelancers shows another picture. Over the last few decades, there has been a rapid increase in the number of professionals willing to work as freelancers. The experts forecast that freelancers would make more than 50% of the workforce in the coming decade. What should then be your choice –a freelancer or employee?
Let’s make the best choice for you, here we go!
On the basis of your Cost
Over the last few decades, there has been a rapid increase in the number of professionals willing to work as freelancers. The experts forecast that freelancers would make more than 50% of the workforce in the coming decade. Freelancers charge you on an hourly basis and their rates can be surprisingly high. In the IT sector freelancers are expected to charge 150 – 200 dollars for an hour of work. The figures may at first give you some hallucinations, but when you weight this against the additional costs you do not have to incur on hiring freelancers, it will seem quite reasonable. Moreover, you are not entitled to pay any benefits to freelancers.
On the contrary, when you are hiring full-time employees for your project, besides giving out the monthly paycheck, you also need to pay for their statutory holidays, employee insurance, medical coverage and even retirement benefits. You also cannot miss out on the overhead expenses incurred in maintaining a functional office space. Phew! These figure sums up to being quite a lot then, especially for start-ups.
On the basis of your Work Quality
When hiring freelancers, as employers you pay them only for the hours of productive work. No work implies no payment. Freelancers strive to deliver quality work to bring in more and more business. Yet with fulltime employees, you need to handout salaries at the end of every month, whether they are dedicated to working or frittering away time on social media. A research estimated that full-time employees squander nearly 750 hours in a year!
Yet the benefit of recruiting fulltime employees for your project is predictability. You are sure of the monthly payroll amount and this gives you a fair idea on the figures of your balance sheet. Freelancers, on the other hand, may end up consuming more of the paid-hours work than expected; taking a fair share of your profits.
On the basis of Predictability and Control
Freelancers often work remotely. From the management perspective, as employers, you have no control over their work pattern and schedule. This virtual distance, however, implies more productive work as they are least likely to get involved in office politics and gossips. However, if your project requires constant interaction with the freelancers, it can be a problem, even if you share the same time zone.
Conversely, the benefit of hiring full-time employees is that you can closely monitor their work. If there’s something that needs to be attended as a priority, you can conveniently divulge their attention and efforts towards the same. Freelancers, on the other hand, may not be readily available in the time of need. They handle multiple projects simultaneously and therefore rush jobs could imply added costs for your project.
On the basis of creating a Work Culture
Freelancers might do good work for your project, but they do not share the same vision as yours. You are just one among a list of their clients and for them its only sheer business. Freelancers disappear as soon as the work is done. Quite the opposite, full-time time employees have vested interest and invest their time and energy to make your project successful. They collaborate together with co-workers to function as a team and help towards building your company culture.
On the basis of your Legal Obligations
The tax and legal obligations differ completely when hiring a freelancer or employee. While freelancers need to deal single-handedly with their tax issues, full-time employees get all their tax matters dealt by business owners. As employers, you, therefore, need to offer them some legal protections and process employee information into the IRS, besides committing a share of their tax liabilities.
Reading through the blog, hopefully, you will be able to make the call. Choosing a freelancer or employee for your project should entirely depend on your business requirement and must prove an efficient investment in the long run.
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