Who is better for your Business, an Employee or a Contractor?

Even small businesses need help. You might start with just you and your family running the business, but if you want your company to grow, you need to hire people who can help you grow the business. My Brisbane bookkeeping business started out as a one-man-show. While my clientele grew, my work hours didn’t. Thus, I acquired partners, bookkeepers, and other professionals who have helped me serve my clients.

Entrepreneurs should hire people as needed. The quality of your products and services might suffer if your company is undermanned. Overworking is counter-productive.

Businesses have the option to hire employees, contractors, or both. How do you know what’s better for your business?

Comparing an Employee vs a Contractor

An employee works fulltime for the company. He or she might perform several tasks as needed and as agreed upon employment. The company trains and provides tools for the employees in order for them to perform their job. Taxes, health care insurance, and other employee benefits are paid in part or in full by the employer. The company has the responsibility to take care of their employees – economically and career-wise. Employees are paid for their time and are hired for constant and long-term employment. Hiring and firing an employee has to be documented and legally compliant for the benefit of both employee and employer.

A contractor is a trained professional who usually specializes on one trade. They are independent workers who comes with their own tools and trade paraphernalia. They pay their own taxes and train on their own account. Contractors may have more than one employers at a time and are hired for periodic or contractual terms. They work on their own time and are paid for a job done.

Benefits of Hiring an Employee

Employees have lower pay rate. Their loyalty is only to one employee. They work in the company premises and can be relied on during work hours. You can train them on the specific tasks you need them to perform. Employers looking for permanence prefer employees. Dedicated employees are valuable assets to the company.

Benefits of Hiring a Contractor

Contractors are trained and ready for highly specialized fields like bookkeeping in Brisbane. They also have their own computers, equipment, and whatever tools needed to accomplish the job. Employers do not need to pay taxes, health care, and employee benefits – a contractor’s fee is fixed. It is easier to hire and fire a contractor. Employers with seasonal needs and are looking for hiring flexibility prefer employees.

Positions Best for Employees

Companies need constant team members they can rely on. Employees take pride of their jobs and seek job security and belongingness in the workplace. Happy employees are dedicated, loyal, and willing contributors to the success of the company. Positions best filled by an employee are office administrators and assistants, sales directors, product trainers, and payroll officers.

Positions for Contractors

Hiring fulltime professionals can be too costly. Business processes that require expensive professional expertise like lawyering, designing, accounting, marketing professionals, or bookkeeping are best filled by contractors. Lawyers to handle specific cases, accountants for your annual audits, designers to build your website, and bookkeepers in Brisbane to create financial statements and file taxes. Marketing professionals can create important marketing campaigns when needed. You can also opt for contractors for your seasonal needs like additional sales clerks during peak season or production workers for high production periods.