There
are several things to consider when you choose between an employee
and a freelancer. Here are a few of them;
Price.
If you would
hire a freelancer year-round, it will be more expensive than hiring
an employee. On the other hand, an employee is a recurring cost that
remains in the books until you fire them. If you only have nine
months per year of work for the employee, you still need to pay them
12 months. Don't forget to count this idle time in your comparison
with the freelancer.
Risk.
Hiring an employee is, in most
countries, a higher risk than hiring a freelancer. You can hire a
freelancer for a specific task or a project. When the project is
finished, the freelancer will no longer represent a recurring cost in
the books. If you fire an employee, usually, you owe them severance
pay. In most European countries, employees are highly protected and
expensive to fire.
Motivation.
A freelancer works for himself,
whereas an employee works for you. The quality of work is potentially
good from both. The freelancer wants a happy client, whereas the
employee wants his employer to be satisfied. In my opinion, the
quality of work depends more on the individual than on their legal
status.
In general, I recommend start-ups to keep their recurring
costs as low as possible, and working with freelancers is a great way
to do that.
As a side note, I want to point out that there is
another solution for temporary work to reinforce your team, and that
is working with a staffing agency. You hire someone through the
agency to work in your company, but the person will technically not
be on your payroll. You will pay the agency directly, and they take
care of all the paperwork.
The cost of hiring a person through a
staffing agency is usually situated between the cost of an employee
and that of a freelancer.
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10 about the author; Erik Victor
1. is a serial
entrepreneur and started his career in Engineering
2. currently a
majority shareholder in corporations in the fields of Industrial Real
Estate, Wealth Management & Investment funds, and International
Tax Planning
3. has a passion for the dynamics of young
businesses and actively endorses several start-ups
4. is an
engaged member of several think-tanks and an international conference
speaker
5. has a business footprint in six countries
6. speaks
five languages
7. personal life - resides in Europe
8. Erik
(48) is known as a discrete and private person, a family man
9.
loves to spend his limited holidays in the mountains or at sea on his
yacht
10. Erik has no social media accounts
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