There are many distinct differences between hiring a self-employed contractor and a full-time employee. Throughout this piece, we will explore the differences and benefits of both options to help you decide which option is the right fit for you.
Benefits of hiring a full-time employee:
Hiring an employee full-time can be the ideal solution for organisations that wish to employ an individual long-term to work across multiple projects or fulfil a consistent role. Key factors to consider when hiring a full-time employee include:
- Training & Mode of Work:
One of the key benefits of hiring an employee is that you can train them in the working manner of your organisation and set performance goals and objectives accordingly.
- Employee Management:
When you hire a full-time employee, you have a say in where they work, the manner in which they work, when the employee works, and how they complete the work.
- Reliability and Loyalty:
Often, contractors are hired on a project or fixed-term basis whereby they agree on working hours and schedules. Therefore, they may not be available at very short notice. However, employees who are employed full-time would be more readily available to work on projects as they arise.
Benefits of hiring a contractor:
Hiring a contractor can be an ideal solution for an organisation that wishes to employ a highly skilled individual on a short-term or project basis.
There are many benefits to hiring a skilled contractor, including, but not limited to:
- Lower cost for tools and equipment:
Sometimes, depending on the industry, nature of work, and the role's tasks, the contractor will provide their own tools and equipment. This is often the case for freelance writers and marketing professionals. However, this may not apply for roles within the science and technology space.
- Knowledge, Skillset & Expertise:
Contractors are often highly skilled in their expertise and usually do not require additional training. However, much like our previous point, this depends on the industry and nature of work. Despite this, hiring contractors can be an excellent solution for an organisation that may need expert talent on short notice or for a limited time.
- Payment and Employer Contributions:
Suppose you decide to hire a self-employed contractor for your organisation. In that case, you will often not have to present a benefits package like the one you would give to full-time employees. Therefore, the payroll process is simplified. The contractor looks after their pay rate, daily/hourly rate. Thus, the hiring organisation pays a daily or hourly rate. Engaging a contractor is more straightforward as the normal contributions are rolled into one hourly rate. Self-employed contractors may engage 3c Global to help with insurance tax, social security setting their rate and more. Self-employed contractors have their own insurance and often consider other aspects, such as their pension, in their daily rate. However, this may be different for employed contractors. For more information, see our blog post here or contact our team today.
- Contract Flexibility:
Contractors are often hired on a project basis or for a short fixed term. Suppose your contractor is not the right fit for the project you have hired them for. In that case, you can conclude the contract when the term is complete and explore other candidates for future contracts. Therefore, hiring a self-employed contractor can be a more flexible, cost and time-efficient solution for an employer than a traditional full-time employment contract.
Therefore, hiring a contractor can be a more cost- and time-efficient solution for a client than terminating the contract of a traditional employee, and onboarding costs can be significantly reduced. Contractors and their skills help a business achieve short-term goals. Best suits their business needs before they decide what's best.
In Conclusion:
Hiring contractors may be a more flexible option for businesses than hiring a full-time employee, as hiring and onboarding costs are reduced. The contractor and their skills help the organisation achieve the short-term business goals for the contract; however, one should consider which option best suits their business needs before deciding. For more information or to talk with our knowledgeable team, don't hesitate to contact us today!
