Though the COVID-19 pandemic threw many businesses for a loop, some organizations grew rapidly, with many solopreneurs looking to expand their team and bring on new employees.

If this sounds familiar and you’re ready to stop working 10-12 hour days, you might be in the same position. Hiring is a milestone all entrepreneurs should be proud to reach, but many often wonder which route they should take: hiring a contractor or hiring an employee.

You can learn more about hiring a contractor here, but if you’re hoping to bring on an official employee, you’ll first want to consider the pros and cons of doing so.

Pro: Business loyalty

When you take on a full-time employee, you’re welcoming them into your business and (hopefully!) a long-term relationship with you. Many employees feel a sense of loyalty when they work for a company versus contractors who work with multiple organizations at a time. If you’re hoping for a team member who will dig deep into your brand and what it’s all about, an employee may be the way to go.

Pro: Minimal training

Bringing on contractors for different projects or periods means you’re constantly cycling through your onboarding process. But with an employee, you can train them once and let them take the reins. Then, as they get to know you better, they’ll be able to take on more tasks independently without your additional oversight. You’ll save time not having to consistently update new contractors on how things work in your business.

Pro: Dependency

If you’re riding solo but hoping to take a vacation, or if an unexpected emergency arises, your employee should be dependable enough to take over. Since they’ve worked with you 1:1 and have a deeper understanding of your business, they can ensure nothing goes awry when you’re away. Whereas if you’re working with a contractor, you might not trust them enough to handle all of your responsibilities when you’re out of the office.

Con: Added expenses

Hiring an employee means taking additional expenses into account, such as payroll taxes, health insurance, benefits, and paid time off. Most contractors don’t require these financial terms when signing their contracts. Your employee might become an integral part of your team, but it will come with added costs.

Con: Legal requirements

When you add an employee to your business, there are a handful of legal requirements you’ll need to ensure you meet. Improperly classifying your employees can lead to costly penalties, making you liable for back taxes and wages. You’ll want to look at the legalities of hiring an employee before doing so, as most states have different requirements.

Con: Termination factors

Working with a contractor involves a smaller commitment since most work on a project-to-project or monthly basis. However, when you hire an employee and navigate the entire onboarding process, it can be more challenging to let them go. Should a contractor not live up to your standards, it’s easy to find a new temporary worker to fill the role. But if an employee doesn’t live up to their initial impression after you’ve already brought them on, terminating them is a more complicated process.

Getting Started

Think you’re ready to hire an employee? Doing so can certainly be exciting! However, before you dive in, it’s essential to map out your needs and what you’d entrust someone else to handle. From marketing to finances to client management, chances are, there are plenty of aspects of your business you wouldn’t mind taking off your plate.

Once you know what you’re looking for, you’ll want to finalize those legal requirements and ensure you clearly understand what hiring an employee will look like for your business. This means making a note of tax requirements and all forms needed to hire someone new.

Setting Expectations

Once your ducks are in a row, it’s time to search for the perfect hire. This might mean posting your open position on job boards or reaching out to those in your network who have recommendations. Either way, make sure your onboarding process is ready to go before committing to someone.

You should outline your SOPs (standard operating procedures), as well as your company handbook that covers policies, values, systems, and workflows. Hiring an employee can take time, so be patient as you look for the right fit!

If you’re lost on how to implement the right procedures for hiring, schedule a call with me today. We’ll chat more about your needs and how to set your business up for exponential growth!