Why hiring contractors instead of employees is better!
August 23, 2013 in Startup
Okay, not to start off a whole war on this topic but just to present what we think is the best way to run our own SEO practice, I thought it perhaps apropos to post on this topic as I now face the normal contractor issue of finding new ones.
Yes, we did just lose a contractor who had been with our Canadian SEO firm KKT INTERACTIVE Inc. for over 3 years…he was a valued important SEO type that I loved working with and I wanted to talk about that search for his replacement.
First, why a contractor over an employee you might want to ask…which is of course a valid POV. Why indeed?
If you hire an employee, you gain much control over that hire – including all things from behaviour control like what needs to be done and who directs the tasks etc and in what order to start with. Then there’s the fact that an employee is paid a salary and as the employer you need to setup complete employee accounts and withhold taxes and and file those taxes along with benefits and the rise in those costs – paying employees is a costly business considering it takes time and expertise to accomplish those tasks as well as money.
Contractors on the other hand cost less. It’s that simple…but again fraught with other issues to consider. A contractor does the assigned tasks, issues you an Invoice which you pay, and then that’s it…there are no employer tasks like taxes or benefits or training costs. There are no worries about overtime or minimum hourly wages or vacation time or sick time or retirement or pension costs….nada. You pay only what the Invoice says is owing and if you properly negotiated that amount up front you know your costs going into a deal with a contractor.
You should also consider the potential downsides of hiring an independent contractor for instance, using an independent contractor sometimes means less control of the process and the resulting end product to you, the SMB business owner, and more control to the independent contractor. Also, you may not get possession of intellectual property that is generated as a result of the work. For example, programs, spreadsheets or documents could remain property of the independent contractor, and he or she could charge you for use of the materials. THIS is important for many SMB owners to take into consideration…but for us, we negotiate right up front on that factor and have always been able to work out a deal that benefits our own needs rarely at a slightly higher cost factor.
So….contractor or employee – which is best for you?
What we’ve learned is to consider the following major factors to help you work out the best deal for your own SMB online business…
Length of project? If this is for an ongoing project requiring continual work with no definitive end date then you may need to hire an employee unless this work requires high skills, knowledge and no direction from you.
Needed Result? This is very valid for our own skillSet search for SEO contractors…one that often works out better for us time after time as the contracting tasks we assign are documented and statistical tasks have measureable outcomes…ie the metrics work for our needs!
Client Contact? Should the work that needs to be done require constant or very periodic client contact you can’t do better than haveing an employee on staff to represent you and your own brand and ensure that there is continuity in proscribed methods and communications etc. etc.
Remote Work? Does the task list include what can be done remotely and if so then a contractor is the way to go for sure…freeing up valuable company funds that will not be spent on offices and utilities and other operational costs.
Damage Control? If you’ve ever had to fire employees for cause or for business turndowns or in fact for any reason…you know how painful that can be for both your employee and you….but when it comes to contractors you simply need to “turn off the work tap” and they then await the next time you offer up projects to them.
Simple neat and yes a decision that every SMB owner must make….so what works best for you and your team?