Seems to be that more and more, com­pa­nies are opt­ing to choose inde­pen­dent con­trac­tors over hir­ing full-fledged employ­ees. Per­haps it is because of finan­cial rea­sons, or maybe their tal­ents are only need­ed part of the time. Or maybe the tal­ent them­selves prefers the inde­pen­dent con­trac­tor life because they love to keep their sched­ule flex­i­ble and be able to explore oth­er areas of their career.  What­ev­er the rea­son, there are pros and cons to both. As the weath­er gets (slight­ly) warmer and every­one is com­ing out of their Hol­i­day Haze, more busi­ness means more hands need­ed. So, which is best for you, con­trac­tors or employ­ees?


Independent Contractor

PROS

  • The most obvi­ous pro here is the cost sav­ings. You are only pay­ing for the work that you are get­ting and the con­trac­tor is respon­si­ble for pay­ing their own tax­es.  
  • You can get flex­i­ble hir­ing and fir­ing.  Since con­trac­tors work on con­tracts, you can hire them for as long, or as lit­tle as you would like. You also have the oppor­tu­ni­ty to test a con­trac­tor out if you are unsure of their abil­i­ty to com­plete the task at hand.  
  • The con­trac­tor brings out­side inspi­ra­tion and ideas. Stay with me on this one. Since the con­trac­tor is (most like­ly) simul­ta­ne­ous­ly work­ing on oth­er projects for oth­er clients, they may be able to bring a fresh look to some­thing that you may be strug­gling to under­stand.  

CONS

  • You have less con­trol over their sched­ules than an employ­ee. Know­ing that they have oth­er plates spin­ning, you might not be able to have their atten­tion exact­ly when you want it.  Now, if you are their biggest client, you may have (what I like to call) the “lion’s share” of their time but you are still sub­ject to get­ting bumped if some­thing impor­tant comes up
  • Unfor­tu­nate­ly, there can be less brand/company loy­al­ty with a con­trac­tor. You are hir­ing THEM for THEIR tal­ents so when it comes to mar­ket­ing, it is more like­ly that they are going to mar­ket them­selves and their tal­ents rather than your company’s
  • This is pos­si­bly the scari­est: you sub­ject your­self to a tax audit. If you have a con­trac­tor that feels like they have been wrong­ly clas­si­fied, they can call up those love­ly peo­ple over at the IRS and your com­pa­ny could be liable for pay­ing back tax­es on them.  To avoid this headache, make sure that you and the con­trac­tor are 100% on the same page. Plus, hav­ing them sign a con­tract that has them agree to their inde­pen­dent con­trac­tor clas­si­fi­ca­tion may help avoid and hic­cups come tax time.

Employee

PROS

  • They are offi­cial­ly in your tribe. Hav­ing some­one all-in, total­ly focused on your com­pa­ny and your brand can­not be under­es­ti­mat­ed.  Being an “employ­ee” can feel more sta­ble mak­ing the employ­ee more relaxed and able to exe­cute with­out the stress of man­ag­ing mul­ti­ple con­tracts.
  • You train and onboard only once. One of the things we wrap our brain around week­ly at Price­less is the onboard­ing process.  Whether it is clients or new team mem­bers, it is a step in the process that is time con­sum­ing but very impor­tant. Choos­ing an employ­ee over a con­trac­tor means that you only have to go through that process once.  
  • From a mon­ey stand­point an employee’s their hourly wage ends up being less than what you would pay a con­trac­tor.  

CONS

  • On the oth­er side of the finan­cial spec­trum, you are pay­ing tax­es, health insur­ance, and any oth­er perks that come with being an employ­ee. That can def­i­nite­ly add up fast. Espe­cial­ly if you are boot­strapped or a small­er team.
  • Also relat­ed to mon­ey, pay­checks are expect­ed on the same day(s) every week/month.  What­ev­er your sched­ule is, employ­ees bank (lit­er­al­ly) on their pay­check.  This gets daunt­ing because no mat­ter what your busi­ness finan­cials are like, you have a huge legal respon­si­bil­i­ty to your employ­ees.  
  • Some­times new blood is nec­es­sary for com­pa­ny growth but turnover inside an all-employ­ee envi­ron­ment can be viewed as hav­ing a tox­ic com­pa­ny cul­ture.  Find­ing ways to keep employ­ees engaged and giv­ing you their best can be chal­leng­ing.

What are my thoughts? I believe in find­ing work hap­py-medi­ums. I am a lover of flex­i­bil­i­ty and free­dom so some­times I am all about con­trac­tor work. On the oth­er hand, my human need for sta­bil­i­ty creeps in at times and makes me think that the only way to feel safe is with an offi­cial full-time job. How do both things live in uni­son? It comes down to bal­ance.  If you have a team of con­trac­tors, love them like employ­ees. Make them feel appre­ci­at­ed, and need­ed. On the flip, if you are the proud boss of a gag­gle of employ­ees, give them some flex­i­bil­i­ty and feed their hob­bies. Get­ting the most out of who­ev­er works for you comes down to treat­ing them the way you want to be treat­ed.

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