November 16, 2022
In the world of online business, everyone who is contributing to the success of the business plays a major role. On the surface, it may seem easier to hire contracted employees to create the mismatched quilt of your team. However, hiring contractors to fill the gaps in your organization is a short-term solution, not a long-term strategy.
Let’s start with a video on how to grow your team the RIGHT way!
Hiring a Contractor
The short version is that there is a significant difference in the purpose a contractor fulfills in a company as opposed to an employee. And don’t get me wrong, there are many cases in which that is a better option. Here are some of the instances where hiring a contractor is the correct option for your business:
- You have a big client project that you need help delivering.
- An expert specialist in a certain field that can help you fill a void that you don’t have on your team.
- Basic administration tasks that don’t take too much knowledge of your company.
- Little to no management on the “how” of a task. You don’t need to know when things are completed, just that they are completed. Deadlines are okay.
- Does not require any type of supervision.
Hiring an Employee
In opposition, hiring employees is a different type of responsibility. Employees are members of your team and are treated as part of your team. You have more responsibility to them, and they uphold more of the standards you set. You have more control over the work they produce, the time you expect them to work, and you get to decide your budget.
Here are some of the ways you know it’s time to ensure the role is filled by a person classified as an employee:
- You decide the hours, pay, and responsibilities of the employee.
- The employee is privy to private company information and intellectual property (and you can protect your IP more thoroughly!).
- The employee upholds standards as outlined by you and your company, from deadlines to systems, the employee is folded into the inner workings of your company.
- The employee has a role in the culture of your company and is held accountable to the role they play.
- You need someone long term that will become a part of your foundations, and you are prepared to train them.
How do I decide what I should hire?
The bottom line is that you don’t really get to choose. Your business will tell you what it needs!
If you are thinking that you need to have full control of their job duties, work hours, your budget, and want to interview and screen candidates to contribute to your company culture, an employee is your next move. Now you can think about building toward long-term solutions, expansion, and bringing people into the fold of your company.
Not only is this designation important for things like taxes and investment, but it is a legal and ethical designation. The IRS decides what type of worker you need based on how they are treated within your organization, by you, and by others. There are 3 ways in which this official classification is made: behavioral control, financial control, and the relationship. Misclassifying an employee can come with hefty consequences, but once you understand the way the designation is identified, it becomes an ethical issue as well.
You have an opportunity to decide what type of help will serve you and your business in the best possible way. It is up to you as the employer, to make a decision that serves the needs of your company, and is a responsible investment. The standards you set in this area of your business are a non-negotiable. It is not acceptable to exploit contract workers, and the IRS is cracking down on ensuring that independent contractors know their rights.