You’ve started your business, it’s growing faster than you imagined. It’s glorious, it’s exciting, but now you need someone to pick up the slack. You’ve reached a point where you can afford to pay someone to start doing the “growing” or to handle your existing clients while you focus on growing. This brings you to a crossroads, should you hire an employee or outsource a contractor? One might be more cost-effective, but the other might play into your long-term growth strategy. One might be someone’s who’s half-hearted invested while the other may be someone who’s ready to help steer you both towards success. How do you choose?
First, you need to consider your financial standing. While business may be doing well, you still may not be big enough to attract a full time employee. Paying them is one thing, but benefits, perks and insurance are another entirely. Plus, if you’re working from your home… you may need to consider a WeWork or similar shared space unless you want to go the telecommuting route which opens a whole nother can of worms.
For these reasons, most people hire the first employee as a contractor. A contractor is going to save you money initially. You’re not obligated to their health care or benefits. The contractor may be a contracted salesperson who you pay on commission basis or it could be a part-time employee to do the work you don’t have the time for while you’re growing the business.
Consider the Structure of Your Business
Hiring a contractor differs from an employee. An employee is a promise and it’s diving in to the deep end — so to speak. For most people, when the time to hire finally arrives, they start with a contractor so they can focus on what the future holds for the company (and a contractor can always turn into a full-time employee). It gives you time to consider what type of business you want to be.
For example, a full-time employee is an investment on your part, but a contractor (at least initially) is a resource. For lack of a better analogy, a contractor is like subscribing to an online tool that’ll do your job for you. The benefit being, the work gets done and you don’t have the pressure of creating a benefits package. You also don’t feel obligated to continue employment for this person. You get them for a contracted amount of time and extend the contract if you see fit.
The Skill Level
Typically, when you outsource, the person you find will be right at the skill level you’re looking for. Whether you do it yourself or hire a recruiter, the goal is to find someone who can “hit the ground running”; candidates who can do the work.
Bigger companies can afford to start slow with internships or large training programs. During a business’ early inception stage, your business may benefit more from a contractor that has specific skills to match what you need and be a self-starter.
Remote & Part Time Workers
The other element of this is, depending on the workload, you may only need a contractor for a finite amount of time daily (or even weekly). The reality is, you probably get pulled off what you’re working on multiple times in single work day. It’s why the 8 hour day, doesn’t really apply to small business owners because time goes to outreach, networking, client work, etc. It’s wearing many hats and it’s constant. However, an outsourced employee is someone that can do the work you give them without distraction. They may turn a 4 hour project (for you) into an hour long project for them.
In other words, a contractor could save you money and you don’t need to worry about paying them more. By comparison, you don’t want to be in the reverse situation wherein you are unable to find enough work for your new, full-time employee.
A contractor can serve you in a “break-fix” type capacity. If this is the case, outsourcing is the way to go. They are going to give you what you paid for without charging you extra “idle” time. Depending on how you structure the contract, you may even be able to bucket their hours so you get them on an “as-needed” basis. If they don’t need to be in-office, and you’re counting on them for maintenance, then they can be on-call 24 hours a day. In other words, they set their schedule which is typically more flexible to your needs.
Reduction In Costs
Overall, an outsourced employee helps you to figure out your business while keeping the company running as is. You won’t necessarily find someone who is going to get invested and drive the growth of your business, but you will get a resource to help lessen your burden.