Freelancers, also known as independent contractors, are becoming a more and more significant part of the modern job market. If you take care of team management in your company and want to assess who wins in the freelancer vs employee competition, first you need to learn who freelancers actually are.
Who is a freelancer?
Well – a freelancer is a person, who provides various services on the basis of short- or long-term contracts, but who is not tied to just one employer with a steady agreement. Freelancers can work remotely, choosing only these projects that seem interesting to them and arranging their own working hours. This employment model is becoming increasingly more popular, and this is because it offers many advantages over the traditional forms of employment.
What’s the difference between a freelancer, employee and independent contractor?
The prime difference is the legal one and it has fundamental consequences as far as taxes, costs and other public tributes are concerned. The distinction between a freelancer and an employee comes down to how much control or authority a firm has over an individual and his or her work. Basically speaking, independent contractors are entrepreneurs running small sized businesses. So, he or she is not an enterprise’s employee but one of clients. So, a contractor has no boss or manager forcing what shall be done each day and how it should be done. One is free to do business with as many firms as he or she wants and usually has his or her own business card, a visible business location – own office or a venue in a coworking space.
Independent contractors usually make their own schedules, do marketing for their own company, decide on their own if he or she wants to work 5 or 15 hours per day, and are available to work in the relevant market. He or she brings to a client’s his or her own equipment, e.g. computer to use for work.
Apart from proper onboarding, one doesn’t require either long and comprehensive training or detailed instructions on how to do everyday work due to the fact he or she is an experienced professional offering skilled services. An independent contractor probably has unique and specialized skills, such as content creating, e.g. graphic designing, or coding which is not a part of a client’s prime income. Usually, he or she gets paid a flat fee for work, or charges by the hour. So, freelancers are independent contractors. But there is no legal term such as “freelancer”. It is generally used to characterize independent contractors who work in creative areas serving numerous clients and staying flexible over their schedule.
Enterprises working with independent contractors don’t have to pay the minimum wage, overtime, workers’ compensation, taxes for a contractor’s Social Security, Medicare, unemployment benefits, and health insurance premiums. Freelancers can’t join a labor union due to the fact that only employees can do it.
An employee is an individual who works a certain number of hours per week, usually in the same venue, under the supervision of a manager who has a direct control over him or her and a work that has been performed.
Hiring freelancers works, but in what situations?
If your company needs some help with a project which is relatively short-term, outsourcing work to freelancers can be much more effective than looking for full-time employees. As long as you know how to manage freelancers, then they are the people you need in this scenario: they will participate in the project, do the job, and move on to other gigs when the work is done.
In some industries, such as graphic design, software development, or internet marketing, it is the freelancers who have the biggest expertise and skill set to perform specific tasks. Hiring freelancers with the right qualifications can help the company perform better in these areas.
In some industries there are seasonal changes in the demand for employees. For instance, right before Christmas, e-commerce businesses are in need of more staff to handle an increased number of orders. Freelancers are the best choice here, as they can be hired only for the period you need them for.
If you want to order work from a freelancer and settle a deal in a fast and easy way you can do it through Useme – a platform that simlipies the collaboration between freelancers and clients. With Useme you don’t have to care about all the fomalities like preparing and signing contracts of work or taking care of documentation, becasue Useme does it on your behalf.
How does it work? Your freelancer uploads the work to the platform, you pay Useme the pro forma. After you accept the work, the freelancer gets payed in 48h and you receive a tax invoice, regardless of whether your freelancer has its own business or not.
You can settle a deal with your freelancer by requesting an invoice for the work that needs to be done.
What else is the secret ingredient in building freelancers’ advantage in the freelancer vs employee scenario? It is worth noticing that hiring full-time employees generates costs related to social security, salary, days off and other benefits. Freelancers are usually paid for the job done, which can be a cost-cutting strategy for your business, especially in the context of short-term projects.
When should you hire a full-time employee?
Although freelancers are the better option in many situations, there are some circumstances, when hiring a full-time employee actually makes more sense business-wise.
If your company needs employees who are physically present in the office for the most part, full-time employees are the best choice. Although the advantages of hiring freelancers cannot be denied in many aspects, freelancers who work remotely are not always available and cannot respond immediately to your business needs.
Another scenario is when a company plans to implement a long-term project that is going to last a few months or years and needs to recruit tech talent which will work on-site. In this context hiring a full-time team member seems more stable and predictable for your business. As for freelancers – they might not be interested in long-term engagement for a single specific task.
Finally, if a company coordinates numerous complex projects that require it to cooperate with different team members, full-time employees might be more integrated and effective in team work. Freelancers are used to working independently, which might translate into a more difficult collaboration across different teams.
Freelancer vs employee – 5 advantages of hiring a freelancer
1. Flexibility
One of the main advantages of freelancers is their flexibility. They can adjust their working hours to project needs, they are able to work remotely, which is particularly important in the modern world, where more and more companies implement hybrid or remote work models. Freelancers are also willing to work evenings, weekends and unusual hours, if need be, just to meet project deadlines
2. Expertise
Freelancers are often experts in their domains. They are experienced and skillful individuals, who know what is necessary to perform specific tasks. Companies are free to choose from a great range of specialists and pick the right person who is the best match for the project.
3. Saving time and money
Comparing freelancer with employees shows that freelancers help your company cut costs and save time. No more long recruitment processes, no need for a full benefit package as in the case of full-time workers. Freelancers usually work under agreements that allow your company to avoid unnecessary costs related to traditional employment. On top of that, paying freelancers after they complete the project can be quick and easy thanks to platforms such as Useme.com. Useme handles all the formalities related to billing and work approval. It also allows you to work with freelancers, who do not run a company and therefore cannot issue invoices. Useme does that for them!
4. Access to a global talent pool
The blessings of remote work allow you to hire freelancers from around the world. This means you have access to a global talent pool, where you can pick and choose the best of the best in the world, regardless of where they are located.
5. Scalability
Hiring freelancers allows the company to scale its resources according to project needs. If only you remember to properly onboard freelancers. with a well stuctured freelancer onboarding checklist and take advantage of all the AI tools to collaborate with freelancers, you’ll be able to recognize their positive impact on your company.
