Who should I Hire: Independent Contractor or an Employee?

Where to Start

Running a business can be tough. The demands are high and the pressures to be competitive are overwhelming. As a one-person show, you are running yourself ragged and are on the verge of throwing your hands up in defeat.  At this point, most small business owners decided to hire one or more people to handle some of the day to day operation.

Hiring the right person whether it be an employee or independent contractor can present its pain points, which is why Xero recently shared what a small business owner should consider when deciding on whether to hire an employee or outsource the work to an independent contractor.


Tips for Success

  1. Time and Money -  In the beginning, a small business can be strapped for cash and unable to pay perks such as benefits. Hiring a contractor allows you to skip the extras and focus on what you need. Hiring an employee and bringing them up to speed takes time and if you’re in the middle of a growth period, you may not have time to educate that person on their tasks. It's important to understand if you want someone dedicated solely to you or if you’re okay sharing a person’s time.

  2. What You need - It’s essential to have an understanding of what your expectations for this person are.  Are you looking for someone to be in the office every day so you can collaborate with them? Or, are you comfortable with someone working in a remote location and completing a set task list? Understanding what you are your needs and expectations are for this person will allow you to determine better who you hire.

  3. Classifications - Do your research and understand the difference between the two classifications. Understanding the difference can be involved, but it will save you a lot of time and trouble down the road, not to mention a potential court case if the employment agreement isn’t set up appropriately.

In the end, you may find that the best hiring decision could be a combination of both. Ultimately, you are looking for the most cost-effective way to keep your small business moving forward allowing you to thrive while keeping an eye on the years ahead.