Independent Contractors vs. Employees: The Pros and Cons of Each

There’s a super thin line between what makes someone an independent contractor or an employee, which can make it really confusing when you are determining between the two. So how do you decide who to add to your team? Do you hire an employee? Do you hire an independent contractor? It can get pretty overwhelming! We will guide you through the pros and cons of each so that you can make an informed decision when building your team! 

Schedules and Working Availability

Independent contractors have their own business, so you aren’t able to have the same control with them in the way that you could an employee. They set their own schedule which means they determine when and where they are working. Most of the time, this is a non-issue but it can be challenging if you have time specific tasks that don’t fit their schedule in the same way you’d prefer or if you’d like them to be available when you plan to work. 

Employees on the other hand have set office hours. This makes for a predictable schedule that is easy to reach them at. Some employees may even report to work in person or work in a hybrid format whereas many independent contractors can and do work remotely. 

Outsourcing vs. Insourcing

Independent contractors are able to hire or outsource their own assistants/subcontractors for work at their own discretion. In many cases this can work quite well as independent contractors can outsource individuals with an expertise in a specific area but you are not always aware of who may be completing the tasks you have assigned. 

Employees are responsible solely for the work that you assign. This makes it easy to provide feedback and allows for smooth communication when completing that particular task. However, if the task is not in their wheelhouse, it may not be completed to the caliber of a contractor who has a speciality in that specific area. 

Contractual Obligations vs. At Will

We hate to think about firing someone but we know it can happen. Employees can be hired and fired at will. With contractors, there are contractual obligations that must be upheld, usually being at least a 30 day notice before parting ways. These are agreed upon at the start of a working relationship. If you are running a strong team and keeping in constant communication, this shouldn’t be an issue but definitely worth noting! 

The Onboarding Process

Employees are usually trained by you through onboarding which can cost you time and money. You are often working with them to expand their skill set. Independent contractors have already completed their own education and grown their skill set. Unless you’re wanting to teach them a specific SOP within your business, 9 times out of 10, they already know how to do it. This saves you time and money while allowing them to begin diving into your work right away. 

Start Up Costs for Materials

When it comes to employees, you’re providing the equipment, software, or materials needed to complete the necessary work. This will cost you money at the start and potentially additional training. Independent contractors will have their own equipment and own all of the necessary tools/software to begin working right away. 

What is the best fit for you and your business?

Every business is different and what works really well for one may not work as well for another. You have to make a decision based upon your needs and goals. It isn’t required to go all one way either! You are in charge of your business which means you could have some employees AND some independent contractors. The choice is truly yours so go with what works best for you as you build your team! 

Still have questions?

We know that there is a lot to sift through when determining what is best as you are building your team! If you are finding yourself with more questions than answers, please reach out to The Abundance Group! You can find us on Instagram @theabundancegroup.

  1. […] You can also consider the differences between an independent contractor and an employee. Read our blog for more info on the pros and cons of each and how you can determine which is best for you. Know […]

  2. […] are the different kinds of workers I could hire? Check out our blog on independent contractors vs. […]

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