The Making of A Team: Contractors VS. Employees

February 27, 2021

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.

So what’s the difference?

The short version is that there is a significant difference in the purpose a contractor fulfills in a company as opposed to an employee. Yes, it is so straightforward to hire a contractor to help you. And yes, it is less expensive for you as well. 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:

  1. You have a big client project that you need help delivering.
  2. You need an expert in a certain field to help you fill a void that you don’t have on your team.
  3. Basic administration tasks that don’t take to much knowledge of your company.
  4. Little to know 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.
  5. Do not require any type of supervision.

In opposition, hiring employees is a significant change. Employees are members of your team and are treated as such. You have more responsibility to them, and they uphold more of the standards you set. The following are ways to know if you need to hire an employee:

  1. You decide the hours, pay, and responsibilities of the employee.
  2. The employee is privy to private company information and intellectual property.
  3. The employee upholds standards as outlined by you and your company. AKA you decide the behavioral of the employee while you are paying them.
  4. The employee has a role in the culture of your company and is held accountable to the role they play in how it develops.
  5. You need someone long term that will become a part of your foundations, and you will invest and train them as such.

How do I decide what I should hire?

Well, the bottom line is that you don’t really get to choose. Once you are thinking of company culture, long-term solutions, expansion, and bringing people into the fold of your company, it makes the decision for you.

Not only is this designation important for things like taxes and cost, 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.

Let’s cut to the chase, 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, the badass CEO that you are, to abide by the regulations and serve your team the ethical way. The standards you set in this area of your business are far-reaching and greatly contribute to the overall standard that is currently being set by the online business community.

Ok, so what now?

Well, now that you know who you need, it’s time to find them. Of course, there is more to hiring than just a job ad and a Venmo name, but no matter what comes next, identifying what you need comes first.

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