If you look at the workflow structure of a business, it’s no wonder freelancers are at such high demand.

Managers and small business owners are able to find the precise skill sets their projects require at exactly the right moment. Freelancers, contingent contractors, just-in-time workers – call them what you want. Members of the Freelance Nation are easily found and vetted through online talent platforms or LinkedIn profiles.

And they’re filling voids in a matter of days, compared to the weeks and months that managers used to devote to onboarding new hires.

Benefits of Hiring a Freelance Worker

Here’s what a company saves by choosing a freelance worker over a full-time hire:

  • Commitment: While top freelancers will find consistent work with a few select clients, both the contractor and the company can choose to part ways at the end of an engagement. That’s the beauty of project-to-project work – no long-term commitment that can lead to dead salary or wasted resources.
  • Materials: Freelancers have their own laptops, software, cars and other materials. This frees up company cash otherwise devoted to expensive office resources.
  • Cost: Contract workers also buy their own health insurance and don’t require benefits, Social Security, training, cost of replacement or recruiting time. And they can’t file for unemployment. For many businesses, this is worth its weight in gold.

But it’s not all about what a business saves by hiring a freelancer. Consider what it gains: Flexibility.

Payroll is a massive chunk of fixed costs for a company. Hiring freelancers to complete projects assists with converting these fixed costs into more variable ones, unfreezing spending on a dime.

Freelancers work on standby, always ready to jump into the fray for a new project if the price is right. This ready-made pool of workers allows businesses to either ramp up or taper down on key projects without the worry of staffing shortages or overages.

Now let’s consider what goes into ending a work engagement. It can take forever to fire an underperforming full-time employee because the employer has to make sure they’re not breaking any of the many equal opportunity and discrimination laws, and they have to make sure that if it’s for cause, that it’s documented and acceptable.

With many 1099 arrangements (a 1099 is an Internal Revenue Service tax return document used to report miscellaneous payments made to non-employee individuals) the employer can just cancel the contract and it ends as easily as it started.

With all the aforementioned reasons just being the tip of the iceberg, why would companies hire a W-2 when they can hire an independent contractor?

More businesses are asking themselves that question than ever before.

Melissa Cooper

Melissa Cooper

J. Melissa Cooper is an expert in the human resources field, with over a decade of experience and a Masters of Science in Human Resource Management from New York University, as well as a Senior Professional in Human Resources (SPHR) designation. She started her own business as a one-woman shop in 2009. Five years later she was managing 400 freelancers.

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