Is your staffing efficient? It can be hard to tell in this tumultuous work environment, with some folks working from home, some on hybrid schedules, and some removed from the workforce altogether. Perhaps your business needs have changed in the last year. Check your business’s pulse regularly with this angle: Does your company have the correct amount of staff? Are they the right kind of employees for the work? Can you streamline your staffing costs? One solution may help you find the right staff at the right cost at the right time: freelance workers.

Freelancers come with polished skills and fresh ideas to help your company get a competitive edge without permanently adding to overhead. For many businesses, freelancers offer affordable, flexible alternatives to permanent employees—but they’re not the right choice for every organization. To help decide if freelance workers are a good choice for your business, check out our pros and cons of hiring freelancers.

Pros for hiring a freelance employee

• Cost savings. A freelance employee often commands a higher hourly wage than an in-house employee, but remember that a worker’s cost includes much more than wages. Freelancers don’t need the company to pay for medical insurance, office space, or equipment; they pay for those themselves. They also take care of their own Social Security contributions, workers’ compensation insurance, Medicare, and unemployment insurance. Even with the higher hourly wage, this adds up to big savings for your company—from 20 to 30 percent over a permanent employee.
• Flexibility. When you hire freelancers, you’ll always have qualified staff available. Freelancers can supplement staffing levels when the workload increases, and when hiring extra permanent staff is neither necessary nor practical. And because freelancers bring specialized knowledge and experience from the get-go, they can produce maximum results right away.
• Legal benefits. Unless explicitly included in the employment service contract, many employment laws that protect permanent employees don’t apply to freelancers, including minimum wage, overtime compensation, family leave, and wrongful termination. The fewer laws to balance, the fewer potential legal troubles.

Cons for hiring freelancers

• Control. Employers can tell freelancers what project they want done, but not how freelancers should do it. That what/how line is a defining factor in the IRS definition of an employee. If you’re dictating how your freelancers do their work, you’re treating them like employees, and misclassifications will get your company in trouble with the government.
• Government audits. Ire can come from the IRS, FTB, and OSHA, to name a few government agencies that could audit your company’s employee classifications. Your workers can also ask the government to evaluate whether they have been correctly classified. Common sense and attention to employment regulations are key to correct classification, especially when misclassification means stiff penalties.
• Flexibility. Yes, flexibility is a pro and a con, because a truly flexible workforce also comes with a price. While freelancers won’t need skills training, they will need education about the company and its goals. There is also no guarantee that the quality of work will be consistent from freelancer to freelancer. If you don’t feel like dealing with this every few months, a long-term freelancer or a permanent employee might be a better option.

Freelancers can be an asset to streamline many workforces. But do you know if freelancers are right for your business? If a qualified, professional opinion can help you optimize your workforce, look to the friendly HR consultants at YES! Your Human Resources Solution. Let our free consultation prove how we can guide your unique business toward continued success!