According to reports in Nasdaq, by 2020 over forty percent of America’s workforce will be freelancers. And for your business, this is excellent news. It means it’ll be easier to find individuals and contract workers who will do one-off projects. In some situations this will definitely play in your favor, and other times it may do more harm than good to hire a freelancer.
There’s a time when a freelancer will be best, and there’s a time when hiring a company will affect the longevity, profits, and scope of your business in a superior way. In this article we’ll discuss the pros and cons of freelancers and when they’re great and as well as when it’s better for your business to hire an outsourced firm to meet your needs.
Freelancers Are Great By Circumstance (There’s A Time For Freelancers)
When you hire a freelancer, consider the scope and the kind of expertise you’ll need for your project.
The more liability, complexity, and increased risk potential, the more it will serve your needs better to have an outsourced team and company work for and represent you.
Consider jobs and projects such as accounting, senior chief financial services, human resources, taxes, payroll, and other functions that have highly demanding scopes – those are jobs where a company will best serve you.
A freelancer will do great for projects such as designing your website, creating simple graphics, and other tasks where no liability, potential lawsuits, or personnel issues are at risk. However,when the job demands more quality assurance, and complex expertise – that’s when it’s best to hire a company.
An Outsourced Firm Has The Personnel For Your Needs
You want a company with more personnel and experts on hand once your company is ready to hand off payroll or is considering things such as giving out equity, 409a valuations, executing a fundraising round, or planning to sell the company someday.
When it’s tax season, and you need your books to look pristine, it’s best to have an outsourced team on hand; this ensures that if anything happens to the individual taking care of you – the company has someone on staff to take care of your pressing matters. If a freelancer gets sick or something comes up – you’ll have to wait until they can get to your needs. On the other hand, with a firm, if something happens to anyone on staff, they have the personnel to care for you, regardless if someone is sick or can’t do the work.
Not only does the company have the personnel to cover you in an emergency, but they also have a team to assure there are checks and balances. When it comes to your books or your taxes, one little oversight from one person could cost you a lot. This is a time when more personnel plays to your advantage.
Measuring the scope of a project and what your needs are will determine if a freelancer or an outsourced firm is best.
In nuanced situations where niche experts and the complexity is larger in scale – a firm may be the best choice.
An Outsourced Firm Shares The Risk And Guarantees Their Work With Shared Liability
When you’re dealing with a freelancer, it’s unlikely they’re willing to guarantee a share in liability. If they mess up or miss something, the penalty falls on you. On the other hand, when you hire the right team – you get a company who guarantees their work and will pay the fee or fix the issue if any penalty falls on you. In the case of taxes, this is something you should have.
When it comes to human resources, tax codes, the law, and funding, you’re better hiring a company who will take the responsibility with you. When a company promises to take on the risk with you – they’re incentivized to give you the best work. That kind of protection and professionalism with shared liability can’t be carried by a one-person team that lacks the infrastructure and organization of a company. When you’re hiring it’ll be smart to consider the liabilities involved if something goes wrong.
An Outsourced Firm Will Have More Resources For The Job
In my recent interview with Joshua Reinhard of TriNet, a leading outsourced HR services firm, Joshua brought up the costs of having the best systems. It’s not always cheap to have the best system because that requires a large upfront and annual fee, plus yearly certifications and training. In some cases, you may not need your hire to have all the bells and whistles, and other times it’s in your best interest to know they’ve got fully integrated systems.
For a freelancer, it’s not feasible for them to pay for the software, training, and staff-hours it takes to know a lot about everything. A company, on the other hand, can hire experts for every situation and have them on hand for any need related to your project.
If a freelancer doesn’t have the right and best software and training for the job – they may have you purchase it or send you to someone else, or even worse, the freelancer will create a piecemeal answer. A freelancer may be able to come up with a hub and spoke model to your solutions, but that’s like putting Honda parts on a specialized European engine. It may ‘run’ but it’s not optimized, making it clunky and vulnerable to breakdowns. An outsourced provider like TriNet can offer you a holistic service that combines the right tools, the personnel, and shared liability which assures you can rest at night knowing they’ll get the work done.
Don’t Let Your Accounting Needs Or Chief Financial Officer Needs Be Piecemeal
At Early Growth Financial Services, we have a full staff. We have tax experts, a team of CFOs and Accountants, a sales staff, and a management team. This means we’ve got our bases covered. We have the experts who know the ins and outs of their areas – and as a team, we all work together to assure our clients get the best service.
If you’re thinking about hiring out for help like; CFO services, CFO consulting, or CFO accounting type services, we’re here to help. Shoot us an email at email@example.com or fill out our form HERE.
Follow Us: @EarlyGrowthFS
Four Questions to Ask When Hiring a CFO
Choosing an Outsourced CFO: How to Find the Right Fit
Hiring Independent Contractors Versus Employees: Potential Tax Pitfalls