Hiring freelancers instead of full-time employees can be an effective way to utilize quality talent when you’re short on time or budget. There are many hoops you have to jump through when hiring employees that you can sidestep when you bring a freelancer or contractor on board.
Have you been considering hiring a freelancer to help you on a project-by-project basis? Here are a few financial perks you might get when you tap into the talent brimming under the surface of the gig economy.
No On boarding Process
It costs both time and money to on board a new employee; you can save both by hiring a contractor. HR experts suggest on boarding takes 90 or 100 days to complete. However, hiring freelancers means you can start working on time-sensitive projects from day one. For example, if you want a contractor to help with data entry, you don’t have to wait until the on boarding process is complete for their work to make an impact. You can find a freelancer for just about any job or project, especially if you use a job board for remote staffing. From marketing specialists to administrative assistants, you can find reliable, capable candidates to boost your business without breaking your bottom line.
Avoid Paying Unemployment Tax
When you hire a full-time employee you have to pay certain taxes, like the unemployment tax. Since freelancers aren’t employees, you don’t have to pay unemployment tax on them or their work. Do take care to classify freelancers correctly, or you could end up paying back taxes and fees for unemployment.
Reduce Overhead Costs
Freelancers supply their own equipment, computers, software and work spaces, so you don’t have to spend money getting them set up like you would an employee. This is especially helpful for small businesses or e-commerce companies that have limited physical space. Plus, you can hire talented workers from across the globe since they aren’t required to be on site.
Save on Sales Taxes
When you reduce your overhead costs, you also save on the sales taxes you’d have to pay if you were purchasing computers, desks, software and other necessities. There are many tax perks to using contract work, and sales tax is one that is often overlooked, but makes a big impact on your budget and financial future.
No Professional Development Costs
Most companies want their employees to learn and grow so they can deepen their impact on your business. However, with freelancers and contractors, you don’t have to foot the bill for professional development. And since you can end the contract whenever you want, you can look for talent with more expertise when you are ready to elevate your game. For example, a freelance social media coordinator can get your profiles set up and put some content out there to increase brand visibility. When you are ready to do more strategic promoting, hire a freelance marketing manager.
Save on Benefits
Offering benefits is an important part of a strong employee retention plan. From healthcare to matching retirement funds, benefits are often the strongest attractors to a position. With freelancers and contractors, you don’t have to provide any benefits, no matter how large your company might be. These qualified professionals will be attracted to your posting because they are excited about the work you do, the help you need and the projects at hand.
Eliminate Payroll Taxes
When you hire an employee, full-time or part-time, you are required to pay a percentage of their FICA taxes—Social Security and Medicare. However, when you hire a contractor or freelancer, they are responsible for their own FICA taxes. This can really add up for companies who don’t have a need for a consistent employee to do a job. If you need a qualified professional to fill a gap from time to time, like a freelance administrative assistant who organizes your calendar once in a while, you can hire a contractor instead of an employee.
Contractors and freelancers bring a diverse pool of talent, perspectives and experience into your company. In addition, you are able to control and save costs in a way that can really make an immediate impact on your ROI.