Is hiring a full-time employee a good idea? Or should you acquire freelancers to reduce cost? Here is a smart guide for you to consider in choosing the perfect option for your business.
Photo credits: Johanna Buguet
It’s time to beef up the workforce. You might think that all you have to do is review a few resumes and set an interview. No, that’s just the tip of the iceberg. Before you post a job ad, there are many things to think about, especially when it comes to your finances and resources inventory. You set up everything to achieve company growth, so hire the right people for your company within a reasonable budget.
The principal question to ask is the type of workers you can hire. You need individuals to help achieve what you need without you paying more than the necessary cost. To respond to this inquiry, you have to choose between the two kinds of workers: full-time employees and freelancers.
Procuring either type of worker comes with advantages and disadvantages. However, the choice should consistently come down to the requirements of your organization.
Here is a practical guide on how to coordinate with your recruitment team towards the right candidate for every job vacancy.
Determining the Requirements for Your Hiring Process
The startup period of your business requires agility. Now that you’re gearing up for growth and getting more people, you should still be adaptable and brisk in making decisions. This is true when you consider hiring more staff since talented individuals are quickly gone. Accordingly, your practices should look like the ones detailed below.
Acquisition Process Must Be Flexible
Having the flexibility to hire various kinds of applicants is critical here. You should welcome individuals to your door without jumping through hoops. You need to prepare contracts to process onboarding without trouble. Make sure that everything, from application to contract signing, does not pose a lengthy legal battle in court regardless of the circumstances.
Additionally, you need adaptability to hire different people to work on various tasks and projects. Depending on your business, you need people who are skillful at other things, aside from the main job description. By searching for somebody who can multitask across multiple projects or roles, you can spare some of your operational costs and possibly allocate it for other necessities.
Adaptability also means a good retention plan. To avoid a high turnover rate, be willing to consider and give what the employees need. Although employee needs may vary according to position or department, you can look for general things that you can give to keep them around. You can even solicit suggestions from your employees on what motivates them and insert them on your offer to encourage highly qualified applicants.
Candidates Must Be Cost-Effective but Valuable
When hiring people, consistently take a look at all recruitment costs. It is not only about the possible compensation; it’s also about the social security remittances, insurance premiums, and mandatory paid leaves. It can also include IT equipment and other overhead costs, such as communication or clothing allowance, if applicable.
If you’re in a tight spot, but you need to hire people, your goal is to limit any expenses. This means you need to find a candidate that offers the best value to your recruitment cost. Make sure to look at the range of skills he or she can bring to the organization.
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Freelancer vs. Full-Time Employee
After having a clear picture of your recruitment requirements, you can better determine the kind of workers you need. If you’re still confused what kind of employee to choose, get to know each of their pros and cons.
Hiring freelancers mean you don’t have employees in your office. This lessens your operational cost like you don’t have to pay for additional utility bills or the usual compensation for a full-time employee. Depending on their experience and skillset, you may also pay a higher rate while they are still working on the project.
If a task is a recurring one, full-time employees are cost-effective in the long run since they develop brand knowledge and network connections inside the organization. You don’t have to go back to square one in terms of internal procedures and branding since they already have the know-how. Most importantly, you can prepare them to become leaders as the organization grows. However, the separation expenses may be high in case a full-time employee is not performing well. It may also mean losing your training expenses when he or she quits after only a few months.
There are specific projects that need specialist knowledge for a short period. In this situation, you may want to consider hiring a freelancer. Most people in the market have already sharpened their abilities before becoming a freelancer. This is one of the reasons that they require higher fees compared to most full-time employees. But aside from what they can do, you should also see to it that their work ethics coincide with your organization’s culture. This is especially true if the freelancer has to work with other teams within your company.
On the other hand, the hiring process for full-time employees can be tedious but unrestrained. You can hire someone with the necessary basic skills needed for the job for a comparatively lower rate, and train the candidate in-house. Aside from the candidate’s basic qualifications, he or she also has the potential to develop additional skills. As they become familiar with your structure, processes, goals, and other business aspects, they can work on things other than their main projects. There are training expenses at first, but as the employee spends time acquiring skills, you don’t have to hire more people to do other tasks since your existing ones can work on the things you need.
A full-time staff works for a certain number of hours inside your office, as cited in the employment contract. It means you can have face-to-face interactions with the employee. It implies the convenience of coaching, team meeting, project coordination, among others.
On the other hand, freelancers are not compelled to report to your office, unless it’s part of the contract. More often than not, they work remotely from different parts of the world. This may imply additional costs for communication and project coordination tools for your business.
Should You Work with An Employee Or A Freelancer?
The response to this question relies upon the business phase, business function, and unique company circumstances. You need to evaluate all aspects since both kinds of employees have their advantages and disadvantages.
In case you are still in the startup stage, you need a ton of flexibility with your staff. You should have the option to pivot immediately. It means you should always have the ability to scale down on your workforce when necessary. Thus, it’s a good idea to have more freelancers on board alongside a few full-time employees to help steer the ship.
However, if you’re already on the expansion stage, you may not require so much flexibility anymore. At this point, you need individuals who are more familiar with how things work internally and develop more skills as a business grows. During this period, it is better to have a high full-time employee ratio. If necessary, you can keep freelancers around to work on specific tasks for a short time but focus more on in-house workforce building.
Consider also the functions that you need at the moment. It is advisable not to outsource your core functions, such as human resources and product development. But for support functions that may not be critical to your daily operations, like bookkeeping or basic project management software programming, you can benefit from the services of a freelancer.
The ideal approach to make a decision is to look deeper into what your organization needs. Rather than putting a cost on your staff, consider who can help drive your organization forward and work your way down from that point. Consider your business stage and the core functions in choosing between a freelancer or a full-time employee.