Hire an employee or contractor? You decide.

Make the right choice when making your next hire.

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When looking to bring on your next team member, you’ll want to ensure that you are hiring the person who has the right skill set, experience and attitude for your business. Prior to this you’ll need to determine whether an employee or a contractor is right for your needs.

What’s the difference between an employee and a contractor?

Employees work for your company, and they receive paychecks, benefits and perks directly from your business. They’re considered a permanent addition to your team. As with any employee, all human resource work – from hiring to firing – involves extensive paperwork and procedures.

Contractors perform work for your business, but do not actually work for you. They usually work on a temporary basis, which means you aren't obligated to give benefits and perks. Adding contractors to your company means more flexibility, as you’ll be able hire and terminate much more quickly.

What are the benefits?

Employees

  • Allegiance: Making someone an employee shows that you are making an investment and commitment to them. Employees will appreciate the dedication you are showing, and this in turn will mean loyalty to your business.
  • More control: Employees must adhere to your set work hours, policies and job environment.
  • Security: Employees are part of your business. Due to this fact, they will likely stay with the company longer and sustain business objectives and goals.
  • Multitasking: As employees learn more about the business, they will be able to learn new tasks and take on additional responsibilities, making your operation more proficient overall.
  • Potential for development: An organizational structure can be built from within, as employees are able to step into management and supervisory roles.

Contractors

  • Skilled and experience: When you need someone with a specific skill set and expertise level, but can’t afford to hire that person for full-time work, a contractor is an excellent alternative. You pay for the experience you need, while you need it, without having to expend the assets to attract the right candidate.
  • Cost reduction: Because they do not work for your business, you are not obligated to pay a contractor’s benefits, vacation time, Social Security, Medicare, FUTA, state unemployment insurance and workers’ compensation costs. In addition, you save on office space and equipment. All told, these items can increase costs by as much as 30 percent.
  • Freedom: Contractors can be hired with a single call and can be dismissed when they are no longer needed. This can come in handy when managing staff for special projects or seasonal employment.
  • Efficiency: Contractors are pre-trained, so you are able to put them to work immediately. As there is no recruiting, training or on-boarding, it makes for a smooth transition into the workplace.
  • Lessened liability: Contractors cannot bring a wrongful termination charge against your business. When you terminate a contractor, you steer clear of lengthy termination procedures that typically come with firing an employee.

In conclusion…

Hire an Employee if:

  • You are looking to place or groom this person in a management role.
  • You want a long-term solution.
  • You are looking for loyalty and company stewardship.
  • You need someone with multiple specialties for all your needs.

Hire a Contractor if:

  • You require someone right now.
  • You need a stopgap while you recruit the right person for the position.
  • You want freedom to let go of them when the project is completed or the season has ended.
  • The work is highly specialized or is short-term.

Whether you are looking to add a talented employee to your permanent workforce, or staff up for a special project with a skilled contractor, we can help. Contact us to learn how.

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