With big and small companies all having to find ways to cut expenses without sacrificing product or service quality, owners are turning to independent contractors to get the job done at a reduced cost.
When you're deciding whether to hire a full-time employee or a freelancer, there are pros and cons to both. In many businesses, a freelancer is the best choice to get the job done without a long-term commitment. If you can offer consistent work, the freelancer you're working with can often become an important part of your team. The benefit is that their expenses are more closely tied to production, but their availability is one of the biggest concerns. You need to find time to match your schedules and develop a convenient plan that will work for both parties. Other disadvantages include investment in trainings, the inability to directly oversee their work, and limited communication time with the freelancer.
On the other hand, choosing to work with freelancers allows you to save a considerable amount of money since you don’t need to think about paid time off, FICA taxes, mandated hourly rates, or required benefits.
Read on to learn more about the advantages and disadvantages of hiring freelancers and where to get the best talent for your business.
One of the potential cons of hiring independent contractors is that you don’t know the quality of their work at first. There is a learning curve that needs to be considered, at your expense, before you can fully assess the consistency of the freelancer’s effort. This can be particularly frustrating if you need to complete the project within a given deadline. But there are workaround solutions with these risks, such as finding another contractor or adjusting the learning curve to give more time for work proficiency.
However, to be fair, such uncertainties also do happen when you hire a full-time employee. There’s even a greater risk involved because you will be investing time and money on training the employee only to find out that you are not happy with the quality of his or her work. But the main difference is that with independent contractors, you can easily terminate the contract and look for another freelancer without being sued for legal actions. Whereas with full-time employees, it is illegal and controversial to suddenly end a contract without a solid basis.
The number one reason why most business owners hire freelancers is the amount of money they can save compared to hiring full-time employees. In most cases, the amount of expenses you need to invest in an employee goes beyond the usual payroll. There are additional costs that can reach up to 50% on top of the total earnings. Social security tax, unemployment tax, health insurance, and retirement funds -the list of overheads besides the usual employee payroll could go on and on.
Yet, with independent contractors, you will only pay for what is produced – no more and no less. Most freelancers work on a term project, meaning that once the job is completed, no additional costs are incurred. Production and the time spent on something are what matters. There is no downtime, and if there is no work produced then no payment is made.
Looking for the best talent to work with your business is not easy, and offering a position to a highly qualified employee can be an expensive proposition. What if you only need a skilled professional for short-term projects? Or a dedicated expert to fill in a small role only when needed? A full-time employee won’t give you such flexibility compared with independent contractors.
A good freelancer knows their craft well and most of them are proficient in different industries, so you’ll definitely find that much-needed expert without the costs and responsibilities of hiring full-time workers. You can outsource everything you need, from writing and content creation to managing social media, building marketing strategies, website programming, and more.
Having decided that your business would benefit from freelancers, now you want to know how to hire freelancers. Doing so is actually very simple, as the online marketplace is filled with various contractors including medical practitioners, lawyers, writers, designers, and even top caliber programmers. Depending on the type of work you need, the allocated budget, and the work availability, there are different platforms to choose from.
Upwork – formerly known as oDesk, Upwork is one of the biggest, if not the most famous, freelancer platform. Millions of talented professionals can be found there from all across the globe, and there are different levels of service to fit your business: Upwork basic is free, and Pro and Enterprise are available as customized solutions.
Paying independent contractors isn’t complicated if you choose to use a well-known freelancer program. Instead of sending payments directly to the freelancer, you will be sending money to the platform, and they are the ones who will schedule and pay the freelancer.
On the other hand, if you choose to hire an independent contractor directly or outside of freelancer programs, you’ll need to send payments directly to them. Keep in mind that with this method, they are now considered as independent contractors working for your business and filing a 1099 with the IRS is required if you pay them more than $600 annually.