Businesses are flexible things these days, far more than they ever were in the past. We have countless options in terms of how to run a business, who works for you, how they work for you, and the actual way you ensure success. Every business is individual, and that means that you need to approach each business with a unique viewpoint.

One choice which many businesses are looking into these days is whether to employee a regular employee or whether to go with an independent contractor, e.g. a freelancer.

It’s a choice which has pros and cons in each camp. Let’s look at these in more detail.

Independent Contractor 
Pros
•   No need to find a place for this person to sit, e.g. pay for office furniture and overheads such as electricity and heating - they work entirely independently from home or another location
•   You have access to specific and high quality skills in a particular field
•   Independent contractors often work out cheaper over time, compared to standard employees
•   No requirement to pay for health insurance or other employee benefits 

Cons
•   You may find it difficult to work in such an impersonal way, e.g. if you don’t actually meet the person
•   Communication can be an issue if your contractor is in a different time zone
•   Finding the right person can be a difficult process 

Employee
Pros
•   This person is working within your office/organization and therefore management is far easier
•   You get to know this person and can therefore manage them according to their personality
•   Employees usually have more than one task, whereas a freelancer will usually have the one specific task to complete

Cons
•   Employees will cost you more over time, because you need to pay for employee benefits and you also need to pay for office overheads, such as heating, furniture, electric, etc
•   Employees may not have specialized skills and that may mean costly training courses need to be attended

As you can see, there are pros and cons to each option, so how do you make your decision? It’s a completely personal deal and something which you need to be mindful of for your specific business as an individual entity. Freelancers work wonderfully well for some businesses, and not so well for others. Conversely, some businesses prefer working with freelancers over regular employees. It really depends on the type of business you have and the types of tasks that you need to be completed.

As a general rule, independent contractors are there to do a specific, highly skilled job, something which a regular employee may not have the skills to do. For instance, you may hire an independent accountant to oversee your financial procedures. By doing this, you are tapping into carefully honed, up to date skills, and that person is an expert in their field. This passes major benefits onto you. A business is far less likely to hire an independent contractor for regular jobs, e.g. tasks which are done on a daily basis within the organization.

Which works for you?

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- The Capex Team