Independent Contractors vs. Full Time Employees: Things to consider

Whether you are growing a small business or downsizing a large firm, the decision to hire an independent contractor over a full time employee can sometimes be a tough decision. Each case has its pluses and minuses, but you can help serve your immediate goals, as well as your long term ones, by weighing these considerations.

Loyalty

There's a lot to be said for the commitment you can get from a full time employee. By bringing someone on board full time, you're getting a dedicated player on your team only. Would you trust a freelancer with your secret recipe? Probably not, but you might hire one to do the cooking. Independent contractors rarely work for just one company, so there are always levels of confidentiality to be considered. 

Flexibility

If you are looking for someone to fill a role within a limited timeframe, an independent contractor can be ideal. At the same time, a contractor may come with some constraints of their own, especially in regards to their hours and availability. What about flexibility in skill set? Since contractors are by name contracted to perform a specialized skill, they may not be able to jump in and multi-task in other departments as readily as your long term employees. But in many cases, that is not a deal-breaker.

Responsibility

Clearly, any new hire can be an expensive undertaking. The pros you can get from a permanent team member are often counterbalanced by the cons: the cost of benefits and overhead. In many ways, hiring a full time employee feels like a partnership, whereas your relationship with a contractor is more of a business agreement. You may feel more sense of responsibility towards an employee as a provider. In turn, they may feel more responsible for the success of your company. The importance you place on an employee’s sense of personal investment in your company may be key in helping you decide.

Whether you are looking for a way to cut costs or are merely in need of temporary resources, knowing when to hire an independent contractor over an employee can streamline your operations. Sometimes the line between the two can be gray, so be sure to know the difference in these classifications when you hire, as interest and tax penalties apply.

What are the questions you ask yourself when deciding between an independent contractors and a permanent employee?