At YES! Your Human Resources Solution, we understand that a balanced workforce is key to any business’s success. Is your staffing efficient? Check in regularly with this angle: Does your company have enough staff, too much, or too little? 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: freelance workers.

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

PROS

• Cost savings. A freelance employee often commands a higher 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. This can add up to big savings for your company—from 20 to 30 percent over an in-house employee.
• Flexibility. Hiring freelancers means always having qualified staff available. Freelancers can supplement staffing levels when the workload increases, 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 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 the laws to balance, the fewer the potential legal troubles.

CONS

• 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, which can catch the ire of several government agencies.
• Government audits. That 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 was a pro, but a 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 show how we can guide your unique business toward continued success!