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Month: August 2021

Pros and Cons Hiring a Contractor vs Employee

Pros and Cons Hiring a Contractor vs Employee

When businesses start up they may invariably decide that you need extra help.

Most small businesses start by hiring outsourcing their work to agencies and freelancers, but eventually, they may decide to hire staff instead to make things more permanent. This article discusses the advantages and disadvantages of hiring employees vs. independent contractors and how starting out can save you money hiring companies rather than employing staff.

Hiring Employees

Hiring employees, a business owner is obliged to pay a wage regardless if there is any work or not. The perfect example is being furloughed during lockdown; this was a headache for most business owners unable to trade.

An employee is basically a person who works for a person or company whereby the employee is under the control of the employer and has to work a certain number of hours each week.

The advantages of hiring an employee are you have sole control of the employee’s work schedule which would mean the employee only works for you and is trained and guided by you. You have few restrictions or limitations on what you can assign to the employee or about your ability to terminate the employee without paying out a contract.

However, by employing a staff member, you have to abide by the laws and regulations of your given country. You cannot hire and fire unless it is legally warranted. You have to abide by the payment of wages or salaries, overtime, and other work rules.

You must adhere to comply with payroll tax requirements, including paying National Insurance and Taxes, Pensions. (This part is an example for the UK, other countries have different payroll rules).

Hiring Independent Contractors

By hiring an independent contractor, you pay for a job or assignment. You do not have to worry about paying for holidays or sick leave. You do not have to worry about paying wages and P.A.Y.E.

The advantages of hiring an independent contractor are you assign a job to meet a deadline and once the job is completed you have no other obligation to the person or company you hired. You can assign duties to an independent contractor and impose a deadline, but you cannot tell that person how to get the job done. You can however ask the independent sub-contractor to sign a non-disclosure agreement to ensure your trading information is not shared with their competitors.

An independent contractor sets his/her/their own hours and fees which are agreed by the client and he/she can work for other companies as well as yourself. An independent contractor often provides his/her/their own equipment and tools i.e., computers, cameras, software, and may come to your place of work or work remotely based on their terms and conditions.

However, when you are doing your tax returns (HMRC UK) you should also include that you have paid sub-contractors.

To be defined as an independent contractor the following must apply:

  • He/She/They consult for multiple businesses.
  • He/She/They control the hours worked.
  • He/She/They choose where they work.
  • He/She/They are ineligible for employment benefits from your business.
  • He/She/They work independently and choses their location where to work.
  • He/She/They decide how they will complete the work.
  • He/She/They incur costs that relate to the comletion of the assignment.
  • He/She/They are experts in a chosen field with the relevant qualifications and experience.
  • He/She/They are responsible for paying self-employment tax.
  • He/She/They are not entitled to workers’ or unemployment compensation benefits.
  • He/She/They are not eligible for overtime pay.
  • He/She/They are not entitled to holiday pay, sick pay or maternity leave.

Disclaimer

This post is meant for UK Businesses and in other countries, federal laws will be different, so you must check the rules and regulations appertaining to your location.

#employee #independantcontractor #subcontractor #selfemployed #outsourcing #hiring #staff #payroll #furlough #furloughed #employment #contractor

Working From Home.

Working From Home.

The burning question that is trending right now is the topic of working from home especially after Rishi Sunak said that “working from home is not nearly as “valuable” for young people’s career progression as going into the office” after the government changed its guidance.

I agree that young people need to be nurtured and need onsite training, they also need to be monitored for complacency. Young people left to their own devices (no pun intended) are more likely to spend more time on their phones than doing any work. Only focused people who are dedicated to their jobs will succeed, that is why it is imperative to keep an eye on young people especially school leavers. A more mature person will be more responsible.

Hence home office jobs should only be offered to people who are more than capable of setting critical time paths (CTP’s) and guarantee to get the job done by the given deadline.

A young person needs to learn the skills first and that usually needs to be onsite. They also need to have someone of authority (management) making sure they do the work properly and do not slack.

The advantages of working from home can be beneficial to both the employer and the employee. The employer will save on overheads of heating and lighting and coffee breaks. Whilst the employee will save money commuting to work.

However, there will be employers that will want to get their money’s worth and will expect their employees to work at the business location rather than home.

Employees, working from home on the other hand can boost productivity as the employee will get more done without the pressure from a normal working environment.

An employer that hires virtual assistants can save a lot of money rather than employing someone and having them on their books.

The employee will have a duty to their employer and an obligation to complete the assignments. If they are customer service telesales they have to have an area in their home designated without distractions. A virtual assistant is a subcontractor and will already be self-employed with their own office setup. A virtual assistant will already be supplying a service that would invoice for the job in question.

In an office, banter is kept to a minimum and people have less freedom to talk, whilst working from home you can do the work productively without the stress of your boss overhearing or management watching you.

Working from home is ideal for mums and disabled people. Disabled people can adapt their home around their office unlike a business adapting their office around the disabled person.

To work effectively from home, you’ll need to make sure you have the technology & equipment that you require, a separate workspace from your family and kids.

When working from home you also need good Internet service and speeds, you will also need a landline or a VoIP phone. You also need to treat your home office as a business and work the hours set out by your employer unless you work for yourself that is.

Top Hybrid Jobs for working remotely include information technology (IT) and healthcare; positions include customer service representatives, sales representatives, project managers, etc.

A lot of top companies such as Google, Microsoft do offer work remotely.

At the end of the day, it is up to the individual’s personal preference and personal circumstances if they would prefer to return to a normal office environment or work from home and the employer should give the opportunity providing deadlines are met. However, the bottom line will be whatever your employer wants rather than what you want.

FURTHER READING.

https://www.thesun.co.uk/news/15762396/rishi-sunak-warns-home-working-harm-career/

https://www.bbc.co.uk/news/business-58068998

#HybridWork #workfromhome #workremotely

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