The “gig economy” has become a catch-all term for many kinds of alternative work arrangements, including independent contractors, contract firm workers, freelancers and temporary workers. Hiring a full-time employee may still be the norm in many organizations, but research from Gallup indicates that for nearly 30% of workers, gig economy work is their primary job.
Businesses choose to work with independent contractors for a variety of reasons. They often offer specialized skills, short-term work and cost savings compared to full-time employees who earn benefits. It’s common to employ several contractors in the initial or start-up phase. However, as the business grows, it may make sense to hire full-time employees. You could (and will probably have to) look outside your business for talent, but take a minute to weigh the benefits of bringing a freelancer you work with into the business full time.
Here are three advantages to consider when you’re considering hiring a contractor as a full-time employee.
1. Scheduling Availability
By definition, many independent contractors make a living by working with several clients. As such, they create their schedules based on multiple client needs. You may have an urgent need or top priority project, but given their other work priorities, the independent contractor may not be able to work on your timeline.
They may deliver fantastic work when they’re available, but you need to have a backup plan if they don’t have the time to help with a project. You may reach a point in your business when it becomes clear that it’s better to have consistent access to an internal employee rather than juggling your priorities based on an independent contractor’s schedule. In that case, it’s time to gauge their interest in becoming a full-time employee.
2. Organizational Commitment
The Gallup research shows that freelance and gig workers have fewer connections within organizations. Instead, they may have a single point of contact within your office. In these situations, the responsibility falls on your business not only to regularly communicate your company’s culture and expectations but also to proactively check in with the contractor to ensure you have a mutual understanding.
Contractors may deliver comparable work to full-time employees, but with competing interests — including their own business — they may not be as invested in your business as you are. Hiring full-time staff from your team of freelancers may be what an organization needs to form a solid culture grounded in long-term relationships.
3. Legal Risk
If you employ many independent contractors, it’s essential to review whether you’re classifying them correctly. Businesses that work with contractors in a way that mirrors full-time employment — particularly in terms of the hours worked and job requirements — may be putting themselves at risk. Studies indicate that up to 10-20% of employers misclassify at least one worker as an independent contractor. These mistakes have severe consequences for employees and employers alike.
The numbers of litigated cases involving misclassification are on the rise. Maintaining a large population of independent contractors rather than using full-time employees can put an organization at risk of coming under fire for misclassification claims. Be sure any benefits you offer to a part-time employee meet legal requirements — and consider whether navigating the regulations for the person as full-time staff may make things simpler.
The Downsides of Hiring Freelancers Full Time
Though there are many advantages to bringing on a freelancer full time, don’t make the decision without also considering the potential challenges. If someone has been freelancing for a few years, they may struggle to adjust to a 9 to 5 schedule in an office. Likewise, they may have been invested in their own business and in working with a variety of clients. It could take time for them to fully detach themselves from their previous role.
Finally, you have to be sure that you have the budget required to pay a full-time employee, including the cost of paid time off, health care benefits and other employment-related expenses. As with any new employee, a contract worker who transitions to full-time employee wants assurance that you can provide stable employment.
Freelance workers hit the mark when you need support on a short-term project or require highly specialized skills for specific part-time tasks. Evaluating the pros and cons will depend on your individual business needs. But if you’re looking for workforce stability, organizational commitment and an investment in your workplace culture, it might be time to consider bringing a freelancer on as a full-time employee.
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