There is often quite a bit of confusion between hiring freelancers and having remote employees, as well as the possible overall benefit of one over the other. The simple answer however, is “it depends on what you are trying to achieve”. In the heat of the COVID-19 pandemic, economic recession, and laying-off of employees by companies all over the world, it can be hard to tell which is a better option for your business.
The question here is not whether or not independent contractors or “freelancers” are better than having remote employees on a payroll but rather, a question of which is a better fit for your organisation per time. This guide makes a case for both. By highlighting their key differences and benefits, you would understand which is better for your business at each given time.
• Exclusivity: The first thing to note about freelancers is that they usually work for multiple clients at every point in time. Thus, the time and attention they would have to offer largely depends on how much demand they have at that point in time or how professional they are to turn down work when they recognize their ability to deliver may be hampered. If your business requires a list of demanding projects and tasks from time to time, you may want to consider a fulltime employee. This is because employees, even if they work remotely provide their services exclusively to you. The fact that they are on a payroll means that they are available during a predictable time frame every day. This is not to belittle the benefit of hiring freelancers. Freelancers are great for intermittent tasks that do not require daily completion. So, you may consider a freelancer if your business needs to grow unexpectedly in a short term and cannot afford to cater for needs of employees beyond the period of that particular need.
• Cost Efficiency: Do you need someone who will be fully invested in the team and the company? Or do you need to scale up for quick projects and cannot afford to hire a full-time person? These are important questions to ask when considering which type of workers best suit your company or business at a particular time. For a lot of reasons, hiring freelancers is cheaper than having a full-time employee on a payroll considering the entire cost of employment. There are so many costs incurred with having full time employees like health insurance, remote learning tools, training, among others. Another thing is that employees even while working remotely are more integrated into the company culture than freelancers. Their investment in your company’s values and culture would extend to other employees, making collaborations smoother, thereby ensuring the future success of the company. In essence, for business owners looking to save costs who do not necessarily need employee-level of dedication, hiring freelancers is a good option.
• Management and Control: As most employees are currently working from home, managers have realized that managing employees remotely is not quite the same as managing them in the office. The issues that arise with regards measuring performance and output often stems from poor communication and lack of transparency which are now more than ever, a critical issue for managers. Hiring freelancers could be the easier shortcut to scale through these challenges, given that freelancers do not really require management especially if they are professionals. Their only objective to carry out a particular task as this is the sole essence of the relationship and cannot under any circumstance be misconstrued. If freelancers do not get the tasks done, they have breached their contract and risk not getting paid, so the relationship is quite clear. It however does raise the additional task of ensuring clear deliverables and timelines for the contract.
The fact is that relying on freelancers can be risky except you have found freelancers that you can trust. It is for this reason that building a long-term relationship with freelancers can be tough. Freelancers are not familiar with your culture or values or even templates; this can affect the relationship and how work is done since you are not particularly under any obligation to train them on how they should do their jobs. However, having employees can help especially with client relationships since they can rely on familiar faces, culture and working styles.
As we slowly move to a new era of remote activities, hiring may be more difficult. However, striking a balance is a matter of priority. What needs does your business have currently? The interesting thing is you can make both options work, it all depends on you, your objectives, and your budget.
If you need support for your recruitment choices or general HR advisory to more strategically manage your HR needs, send us an enquiry at firstname.lastname@example.org