If you are trying to determine the difference between independent contractor vs employee to establish which one is better, then keep reading. As a young entrepreneur, you may experience this dilemma when developing your business. Hiring a new employee or an independent contractor is a very important decision.
Independent contractor vs employee
If you hire an independent contractor, you can reduce costs in payroll, expenses, and benefits. Furthermore, you will not have to worry about health benefits. In the US, the average total cost when it comes to health benefits was of $6,215 back in 2013.
When hiring an independent contractor, your company’s work program will be more flexible. You will have better cost control during slow periods. Furthermore, your independent contractor will already be highly specialized and completely trained when working for you. Therefore, no extra training will be needed.
However, there are also some disadvantages you should be aware of when hiring an independent contractor. First, they are allowed to choose the control over the work they perform. You need to consider the fact that they may have another project they need to work on. Therefore, contractors would be less committed compared to an employee.
Furthermore, the rates charged by an independent contractor may be way higher than you expected. They can charge you by project, and the costs depend on the overall market demand. On the other hand, when it comes to hiring an employee, you can establish the pay rate until the future review date.
Employee vs independent contractor
When you hire an employee, you are sure that they are committed and loyal. Furthermore, loyalty means increased productivity. In this way, you make sure that the person you hire is passionate and works hard to help and fulfill your business’ prospects and goals. If you have a loyal staff, they will always be ready to take on more tasks to help your company develop.
In an organization, employees may perform many roles. This means that they need to be skillful to fulfill the tasks. To develop their skills, you will need to settle various training programs as learning opportunities. In this way, you will have a diverse, flexible workforce for the company.
Another advantage is a better work flow. If you have a loyal team of employees and a steady stream of tasks, your company will be able to meet all the deadlines. It will be much easier for you to coordinate the projects. Therefore, if you choose independent contractors to meet project deadlines, it may be quite of a challenge.
The downsides of hiring an employee may include the fact that you will have a lot of responsibilities. You will need to take care of your staff’s payroll while helping them provide for their families. Furthermore, besides taking into account the costs of employee payroll and benefits, but you will also have to pay for a bigger space, sign a lease and get equipment.
All these advantages and disadvantages can help you choose between hiring an independent contractor vs employee. However, specialists recommend to hire employees since they are more loyal and they will be able to deal with your business’ work flow, meeting the deadlines.
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