The Pros and Cons of Hiring an Independent Contractor
(This is a contributed post)
Over the past decade, the way that we work has completely changed. Being able to work flexibly or working remotely has changed a traditional workplace for many people. Many more people work from home a couple of days a week, or even run their own business from home. This can allow more people to work as freelancers or contractors. And in a recent study in the US, it was found that a staggering statistic of nearly 35% of people are working as freelancers. That is over a third of the workforce in the country working for themselves, and working remotely or as a freelancer. In fact, this statistic is expected to grow more and more, with over 40% of the workforce predicted to be working flexibly or as freelancer in just to years time.
So with this all in mind, if you are an employer in a fairly traditional workspace, then you need to be looking at the value that freelancers could have to your business. Equally, though, are there more benefits to having full-time contracted employees?
The rise of more and more freelancers can be down to the internet, and freelance sites like Upwork and Fiverr. They allow people to post what work they need doing, such as copywriting or logo design. Then you can pitch for the work, depending on your skills, availability, and pricing. Employers can have some financial savings when it comes to hiring freelancers, as they are only paying for the specific job that they need to be done. That can be both good and bad, though. As you may need them to do more, which means having to wait again, rather than just getting someone in the office to get it done.
Freelancers enjoy the flexibility that comes from their work. They can set the hours that they want to do, which for someone hiring them, can mean that you are likely to get the work done quickly and promptly. As they can set their schedule, they can work late into the night one evening to meet a deadline, if they needed to, for instance. This can be hard to estimate the value of, for the employer hiring them, as well as the freelancer.
However, that being said, it is important that you hire freelancers that are going to work to your deadlines, and not to their own. They will have other clients, and being made a priority is important. If a freelancer is tied up with other work, then they may not respond quickly enough for you. If you do decide to go down the freelancer route, then it can be a good idea to have a pool of freelancers that you work from, just so that you always have a backup to get the work done as and when you need them to.
But are freelancers going to be more cost-efficient for your business than a contracted employee? In many ways, they can be. The hourly rate of a freelancer may be a little higher (between 20% and 30%) of a hired employee. But when you take into account the actual hours that they work, as well as the things like insurance or other employee benefits, it can work out cheaper. You pay an employee to be at work, whether they do any work or not. It can also reduce the need for office space, as they can work from anywhere (unless you want them in the office when doing the assigned task).
There is said to be an element of reduced risk with freelancers too. The reason being that they are not hired by you full-time; the contract is only for the job that has been advertised for and that you’ve stated. So once it is done, it is done. You can hire them again, of course, but there is no other expectation from them. You are likely to need less employment law advice with freelancers than you would with employees, simply because a freelancer doesn’t have the same rights as a employee does. If the freelancer doesn’t do a good job, for example, then you can ‘fire’ them instantly. You never need to hire them again. Contracted employees on the other hand have a longer and more complicated process if things aren’t going well. So as you can see, there are plenty of pros and cons when it comes to hiring, and what you’d prefer may not be what other employees prefer.
With freelancers, you are likely to get experts in their field. They are likely to have plenty of experience with what you are hiring them for (think graphic design or accountancy, for example). So they can just get on and do the work for you. Unless you have employed people with varying skills, then employees may need to practice or brush up their skills to be able to do the same job. This isn’t going to be true for every employee, as some will have the skills that you need for a specific thing. But it is certainly something to think about and consider when it comes to hiring.
Hiring freelancers can also expand your global reach. As they work online and remotely, it means that they can be working from anywhere. So you don’t just have to think about hiring those that work locally. You can hire people in areas that are cheaper, as long as they have the skills necessary. With things like Skype and FaceTime, it means that you can still make sure that they know exactly what is expected of them. You can just end up with a cheaper bill at the end of it. The downside of this is that there may be a need for a certain level of supervision (at least in your mind if it is for something specific). That can be hard when you are only using those that are based remotely or even in a different country. So that is another factor to think about, depending on what you are hiring them for.
There are certainly pros and cons of using freelancers, so decide what will work best for you and your business. Some businesses are suited better to hiring them than others.
