Hiring a freelancer or full-time employee is a big decision, as is starting a business. However, scaling up is a complex problem you do not want to encounter when you have just created.
So, do you want to save money and go with a freelancer, or do you want someone who will work long hours for little pay?
Should you be hiring freelancers or full-time employees?
There is no simple "yes or no" answer to this dilemma.
It can be tough to decide which option is best for your business, especially if you're in the middle of a hiring frenzy.
As the proprietor of a company or the founder of a new venture, you probably asked yourself at some point, "What are the most efficient ways I can make more profit while saving money?" Also, since outsourcing work to freelancers has become popular, many of you may consider changing your business culture.
However, throughout history, employees have been in charge of running companies. Considering that freelancers and the gig economy are relatively recent phenomena, you must be curious whether or not it would benefit you and your company if you run your company with the assistance of freelance workers.
Let's look at each option, highlight, and discuss corporate facts in this blog to help you decide whether to hire freelancers or full-time employees for your business.
Before choosing to hire freelancers, remote workers, contract workers, part-timers, or full-time employees, let's check before coming to any conclusion. Make sure you know the pros and cons and the responsibilities of both options.
Let's start with full-time employees.
Things you need to know about hiring full-time employees!
Hiring a full-time employee is a big commitment for a business that needs to be made with the utmost care. There are many things to consider, from the financial implications to the impact on company culture.
Even before you hire them, you need to know what questions to ask, how much to pay, what your role as an employer is, how much the overhead cost will be, and the responsibilities of hiring full-time employees.
As with every other startup or small-to-large business owner, employers consider hiring more employees and expanding their workforce to take on more work, with the expectation that more work will result in greater profits.
However, hiring a full-time employee comes with benefits and drawbacks, just like anything else in this world.
Let's start with the pros and cons and then understand the typical cost of hiring full-time employees.
The pros and cons of hiring full-time employees
1. The pros of hiring full-time employees include:
- A more stable workforce and employees are more likely to be committed to their full-time jobs compared to part-time workers or freelance workers.
- New employees can bring new skills and experience compared to less experienced workers.
- They are less likely to call in sick to take unplanned days off. It can be a significant advantage for businesses that need to maintain a high level of customer service.
2. The cons of hiring full-time employees include:
- The higher costs are associated with salaries, benefits, health insurance, paid leaves, and training.
- The risk of hiring employees who may not be a good fit for the company.
- They also tend to be less flexible in terms of their work hours.
- They are more likely to expect raises and promotions than part-time workers or contract workers, creating tension and conflict within a company.
- Full-time employees may be more likely to become disgruntled and quit if they are unhappy with their job or feel overworked. It can lead to high turnover rates and the need to constantly train new employees, which can be costly and time-consuming.
And, if your business is seasonal or subject to fluctuating demand, you may end up with more staff than you need at certain times.
The typical cost of hiring a full-time employee
Overall, hiring full-time employees is a big decision that business owners should make carefully considering all the factors involved. Weigh the pros and cons carefully to see if it is the right decision for your business.
- Paid leaves
- Payroll taxes
- Bank charges
- Training costs
- Travel expenses
- Medical insurance
- Long service awards
- Company cars and fuel
- Employee referral costs
- Appraisals and promotions
- The retirement benefits scheme
- Salary and employment benefits
- Onboarding and provisioning costs
- Pre-employment background check
- Expenses for food and entertainment
- Deferred productivity due to the lengthy hiring process
The pros and cons of hiring freelancers
Now let's see what freelancers bring to the table.
The pros of hiring a freelancer:
- Freelancers are often more affordable, with no expenses other than their charged rates.
- They're more flexible in terms of hours and working arrangements.
- Freelancers often have a wealth of experience and can offer a fresh perspective to your business.
- Freelancers get the work done more quickly than if you were to hire a full–time employee. Freelancers are not usually bound by the same rules and regulations as full-time employees, so they can often work more flexibly and get the job done faster.
- You have the freedom to employ the expertise you require on a short-term or project basis without breaking the bank.
You pay for a job, not for an individual.
There are many pros to hiring freelancers because they're not usually entitled to the same benefits and protections as full-time employees.
The cons of hiring a freelancer:
- You may not have as much control over the quality of work and their work schedule.
- Freelancers may be less reliable than employees, as they often have other clients working with them and may not be able to commit to your project full-time.
- They're not technically employees, and you may have a more challenging time holding them accountable for their work.
Common freelancers' hiring costs
When it comes to hiring and managing the cost of freelancers, Gig4U has entirely made the process simple and hassle-free.
You don't need to find freelancers traditionally through social platforms or referrals. Post your job requirements, and we will find that talent for you in no time.
Besides that, there are not many expenses when hiring a freelancer:
- You have to pay per project, hourly, or the set charges by the freelancers.
- You don't have to provide assets to them, no health insurance, no paid leave, and no extra expenditure.
- If you use freelance platforms, you might have to pay a sliding fee for the services. It'll simply mean you're paying them to help you find vetted freelancers or contract workers, which would have taken longer and consumed your precious time if you did it yourself.
Save your time and money!
Compare the cost of hiring freelancers and full-time employees.
When we compare the cost of hiring freelancers and full-time employees, we must consider the quality of work, the commitment to the company, and the overall cost.
So, ultimately, it's all up to you and your business's specific needs. Most of the time, it's a matter of preference.
It will also vary greatly depending on:
- The work
- Your niche
- The urgency
- The location
- The position
- Their experience
- Your budget or funds
- The talent requirement
Decide between freelancers and full-time employees
The main question is how to decide when to hire freelancers, independent contractors, and full-time employees. When is the right time to expand your business or workforce?
Well, there are a few key factors to consider before making any decisions:
The nature of the work that needs to be done
Hiring a freelancer may be the best option if it is a one-time project or something that is not integral to the company's operations. It is because freelancers are typically more affordable and can be hired on an as-needed basis. However, if the work is ongoing or essential to the company's operations, it may be time to hire a full-time employee.
The amount of work that needs to be done
A freelancer may be a better option if you only need someone for a few hours a week or per project or task. However, if you need someone for 40 hours or more per week, you will likely need to hire a full-time employee.
The in-house talent requirement
If a complex short-term project requires specific skills and knowledge, such as web design, app development, or tech professionals, you may need to hire a freelancer with expertise. However, if the project is relatively simple and can be handled smoothly or doesn't require to be done urgently, then a full-time employee may be a better option.
We hope you enjoyed our blog post, "A Guide To Choosing The Right Fit: Freelancers Or Full-Time Employees." As you can see, each model has several advantages and disadvantages, so you must weigh your options and decide what best suits your business.
If you already have a remote team of freelance workers or full-timers, check out our blog post on "Building trust with your remote team or freelancer team." Similarly, if you want to hire freelancers but are confused about how you'll manage them, check out our blog post on "How to build a scalable and economical remote freelance workforce."
Lastly, if you have any thoughts or queries - please let us know in the comments below.