Any small business owner needs to determine whether to hire a new employee or go for an independent contractor. This can be a very crucial decision and therefore one needs to carefully consider the pros and cons of hiring an independent contractor or an employee.
Pros of hiring an independent contractor
- Though one has to pay more per hour or per task but in the long run you can save a lot of money because you need not commit to a monthly salary or pay for the health benefits.
- You get more flexibility while working with an independent contractor since if you are not satisfied with their work you will never hire them again. Firing an employee on the other hand can be a very complicate process.
- Freelancers come with years of experience in a specialized field and therefore you need not train them personally.
Cons of hiring an independent contractor
- When you get a freelancer to do your job for you, you will be losing control over the work being performed. You won’t get a chance to monitor the task though you can provide basic guidelines. Since the independent contractors don’t work on site they are more likely to complete the task in their way.
- Since they generally operate on the basis of first come first service you are less likely to find the same worker for another project.
- You have to remember that they are not a part of your team and don’t have any sense of loyalty to the company.
- The freelancer would be the owner of all the copyrights if you don’t draft an agreement beforehand.
- They will perform the task under their personal business name with their own logos. As a result your brand won’t get promoted.
Pros of hiring full time employees
- A full time employee will come with more commitment and stronger loyalty which would automatically lead to enhanced productivity.
- Staffs who are loyal to your company will readily take on additional tasks to make your organization grow.
- In small organizations full time employees generally perform a number of tasks. Therefore you can have them perform a number of tasks at times when your workload is high. Moreover this also gives them an opportunity to learn while you can expect a diverse workforce for your organization.
- Tasks can be delegated permanently to the full time employees; this would free up your time and allow you to perform the tasks which are most suited to you.
- Whenever you take a break from your work, you can be rest assured that someone is taking care of the job in your absence.
Cons of hiring full time employees
- Your full time employee will be expecting certain benefits like vacation time and health care. Moreover if you are currently conducting a small home business or a small office then you might need to shift to a larger space, buy the equipments and sign a lease.
- Even when your business has a lull, you will still need to give them a monthly salary.
- Once your business starts to get bigger, you will get more embroiled with managerial issues rather than practicing your trade.