Blog Recruitment Performance Your Business Is Expanding: Should You Hire More In-House Staff or Look to Freelancers?
in-house staff or freelancers

The population of the private business sector increased by 3.5% between 2018 and 2019 – that translates to 200,000 more businesses in the UK during that period alone. No matter what niche your company operates in, there will always be competition, and that makes every decision you make a critical one. If you’re aiming to grow and expand your business, one key decision relates to the employees you hire: will you be recruiting in-house staff, or will you be relying on contractors? The jobseeker market is booming at the moment, so it’s a good time for hunting down talent. If you’re looking towards expansion, now’s the time to consider how you will be filling the roles.


Weighing up the pros and cons

Polls show that 58% of small and medium-sized enterprises (SMEs) are now working more with freelancers. There are advantages to doing so, but there is no solid evidence that it is better than hiring employees. Choosing the most sensible and cost-effective model for your business simply means investigating the pros and cons of hiring different types of workers according to the role you need to fill.


The first step in doing this is to ensure you have a solid understanding of the key differences between contractors and employees. Work with a contractor involves entering a short or long-term agreement that an individual will do a particular task for a set fee. They are responsible for their own taxes and will have freedom over when and where they work. An employee, on other hand, will require your business to cover their expenses and equipment and will work within the rules and systems of your business. They will be on your payroll and will be covered by your insurance policies.


The arguments for hiring freelancers

Freelancers are specialists within their niche, and if you are looking for someone to complete one-off projects or tasks not within your employees’ usual remit, they are a good option. If you need a logo or graphics, for example, hiring a freelance designer will fulfill an immediate need without having to add someone to your long-term payroll. This can save you money in the long run, helping you achieve your goals for expansion. As the business owner, you can control how much work you outsource to a contractor, allowing you to purchase their services on a pay-as-you-go basis.


A Forbes report shows that the ability to work remotely is a powerful motivator for many freelancers, and 90% of them do at least part of their work from home. If you’re looking to expand, working with freelancers is a valuable way to do this without moving premises to accommodate a growing team. This also saves your business money on equipment.


The argument for traditional employees

There are over 2 million freelance workers in the UK, and finding an experienced and reliable one who fits your budget can take a lot of research. Once you do find one, it may be necessary to book them several months in advance, as they’re likely to be in high demand. This requires you to think one step ahead, and may not be the best choice if you have regular deadlines that need to be met.


When you hire employees, a contract is put in place before an individual joins your company. However, with a contractor, they manage their own time, and you have no legal position if they quit partway through the work. If that work then needs to be updated, unless you can work with the same contractor, it may not be easy to get the work done time (or cost) efficiently. Additionally, while a contractor may be an expert in their field, you will need to take time to show them the specific workings of your business: hiring an employee may ultimately be more cost-effective if you want ongoing work completed.


There is no cut-and-dry answer to whether hiring freelancers or employees will be best for your expanding business. Each role will need to be considered carefully, and you’ll need to assess your needs for each position. However, as a rule of thumb, it is probably still advisable to employ full-time employees for ongoing work and keep them trained in the specifics of your business; for one-off jobs that fall outside of your employees’ usual remit, hiring freelancers could be a sensible move.

Lucy Wyndham

December 17, 2020

Lucy Wyndham is a freelance writer and editor.

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