Share what you know with millions of people
Focus is the best place to turn what you know into remarkable content
0
Freelancers- do you use them?
What are some pros and cons to using freelancers as opposed to taking on new employees?
Events
- Dos and Don'ts of Small Business Marketing May 29 @ 11 am PT
- Lead Nurturing 202: The Next Generation May 31 @ 11 am PT
- The Tricks to Paid Media June 6 @ 11 am PT
- Display Advertising for Brand Awareness June 20 @ 11 am PT
Related Activity
2 Answers
You need to analyze the pros and cons in the context of the specific role you are trying to fill. First, I would only recommend using for freelancers for roles that are not:
1. strategic in nature; and
2. critical to achieving a core objective.
Having said that, there are a number of benefits to using freelancers. They can be cost effective on a "wage" basis; provide a more liquid, on demand form of labor when compared to full time employees; and can provide skills that sometimes aren't available from full timers.
There can be negatives though. Freelance workers are tougher to control for quality. That sometimes means that the cost of managing and interacting with freelancers is surprisingly high. You also need to be careful of classification issues. Many states are not going out of their way to classify freelancers as full time employees in an effort to boost payroll tax receipts.
Freelancers fill a valuable role when you need:
-- Specialized or expensive skills that do not make sense to hire on a permanent basis
-- Flexibility to grow or shrink your labor pool based on changing demand or need for specific skills
-- Lower labor cost risk relative to hiring full-time employees, even if that flexible labor pool is more expensive than hiring full-time
I once ran a business that employed a wide range of highly-skilled freelancers, including Ph.D. and other experts. These folks worked on a fixed price contractually linked to specific deliverables and time frames. Full-time company staff managed these freelancers and were responsible for quality control.
As Mark W. said in his answer, you must be careful regarding classification -- contract, 1099 labor must meet certain IRS tests or run the risk of being reclassified as employees. These regulations are sometimes ambiguous, so definitely consult a good accountant to ensure you do not inadvertently create a situation where the IRS (or state tax authorities might reclassify your freelancers as employees. That reclassification can be a very expensive problem!
Answer This Question