As you scale your business, there will probably come a time when you can’t do everything yourself. At some point, you’ll have to bring on help in order to keep growing your business. There are two main ways you can get the support you need to expand—hire an employee or contract out work to a freelancer.
There are advantages to hiring an employee rather than a freelancer. An employee is more integrated into your company culture because they don’t work with multiple clients. As a result, they may be more invested in your company’s long-term growth and success than a contract worker.
However, there are many benefits of working with freelancers rather than employees, especially if you’re a start-up with a lean budget. As a freelancer myself, I prefer to work with other contractors for the cost-savings and flexibility. Here are some reasons to consider hiring contract workers instead of employees.
Benefits of Hiring A Freelancer
Freelancers Cost Less
Freelancers usually expect to earn more per hour than employees. But it still costs less to work with a freelancer because you don’t have to pay them benefits. It’s costly to cover your portion of payroll taxes and provide health insurance and retirement plans to employees. It’s estimated that you can save 20% to 30% annually by contracting out work to freelancers instead so you don’t have to provide a benefits package.
Freelancers also save companies money because they don’t need equipment, software, or office space from you to carry out their tasks. Because freelancers are running their own business, they usually already have everything they need to do the job, from laptops to printer ink to SEO software. Since you don’t have to cover those expenses, you’ll save money.
Freelancers Are More Flexible
Working with freelancers usually affords you more flexibility to adjust workloads up or down as needed. If your business enters a busy period, you can pass on more work to the freelancers in your network without incurring extra costs. Although you can ask your employees to put in overtime, you may have to pay them extra if they were hired on an hourly basis. You won’t have to pay a freelancer extra if you give them more work, and you may even be able to secure a bulk discount.
Generally it’s also easier to let freelancers go if they deliver unsatisfactory work or you no longer need their help. With employees, you need to make sure you carefully follow all labor laws when laying them off or firing them for performance reasons. But with a freelancer, you can end the working relationship at any time for any reason. Because freelancers run their own business, the same worker protections usually don’t apply to them, so there’s less risk that you’ll accidentally run afoul of labor laws.
However, make sure that you understand the key differences between working with employees and freelancers. You can’t dictate a freelancer’s schedule and work location or bar them from working with other clients. There are misclassification penalties for treating freelancers like employees, which is something to be aware of.
Freelancers Can Self-Manage
Another benefit of hiring contract workers is that they can usually self-manage your project without much direction from you. Because freelancers are used to working independently, they don’t need much guidance. As a freelance writer, I can take an article topic and run with it. Although it’s nice when clients provide article outlines or source materials they’d like me to incorporate, I don’t need those things to get the job done.
Many freelancers are also great at delivering high-quality work on tight turnaround times. You don’t build a successful writing or graphic design business by missing deadlines and handing in subpar work. Our ability to secure work and earn a living hinges on our reputation, so we do everything in our power to please our clients.
Freelancers Are Experts
In order to attract clients, freelancers usually need to niche down and get really good at a specific task. As a result, it can be easier to find freelancers who are experts at coding in a certain programming language or writing about a specialized topic. If you need help with an important, niche task that’s outside your area of expertise, it may be better to call on a freelancer for support than an employee.
If you’re considering bringing on help, are you learning toward hiring employees or contract workers? Share your plans in the comments section below!
Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.