The Pros And Cons Of Hiring Employees vs. Contractors


One of the most stressful things about running a business is that as soon as you make one decision, there’s another to be made.
It truly is a hydra-headed problem: looking at all the real estate available and choosing which venue you’ll invest in for your business takes quite a bit of time and effort, but right after you’re done doing that there’s no time for any much-earned rest, as you’ll then have to research and purchase all your initial equipment and merchandise, and after that you’ll have to choose whether to hire employees or contractors, etc.
Let’s focus on just that last issue for now: employees vs. contractors. The right choice between the two for you, of course, depends on your particular situation. Here are the pros and cons of each option:

Pros of Hiring an Employee
Consistency is necessarily for maintaining the level of production and customer satisfaction you need to succeed. Different industries have different demands, but just about any business regardless of industry will sometimes receive more of an abnormal increased workload (this could be a sudden and large order for a B2B company, a season that brings in more customers like Christmas or Valentine’s Day for a B2C company, or some other special occasion).
Knowing that you have employees ready at all times allows always to meet your client/customer’s expectations, which will provide much revenue and inspire organic (as well as incredibly effective) word-of-mouth marketing.
Cons of Hiring an Employee
Employees are expensive. They’ll cost you more in training and taxes than contractors. From a strictly bottom-line perspective, employees aren’t as attractive as contractors.
 Pros of Hiring a Contractor
The cons of hiring an employee resemble very closely the pros of hiring a contractor, says a bankruptcy lawyer. A contractor simply won’t cost you as much (in the US, for example, you don’t have to split their share of what they owe the IRS in Social Security and Medicare taxes, which you would have to do with employees).
Also, it requires much less time and effort to hire and fire contractors compared to employees, giving you much less flexibility. For that reason, contractors make a great fit for short-term projects or when you need to ramp up for a seasonal swing.
Cons of Hiring a Contractor
The disadvantage of hiring a contractor is that they won’t feel much loyalty toward your business, which means they’ll be on average less productive than in-house employees. So, while contractors may be a great fit for short-term projects, they certainly are not as great a fit for ongoing, everyday work.
Thinking through the pros and cons of employees vs. contractors should help you decide how to staff your company. You may even find a mix of the two works best for staffing appropriately. A careful evaluation of your business and projection for growth will make the situation less stressful, according to an accountant in Utah.


Cook Martin Poulson, P.C.