Freelancer vs. Fixed Employee. When to use who?

5 min read

dark fox

Freelancer or fixed employee, when to hire whom?

Well this is a very specific question which doesn’t have a direct and general answer. There’s one simple answer that may be given in response to this question though. And this’d be, “it depends on the type of company that you have, what you want to achieve as well as your financial ability. But from the scratch, you need to ask the questions that, “how do you want to achieve your ultimate goals? Do you need a concrete company culture? Or do you also need to tap the state-of-the-art talent? If you consider these questions, then you’ve come a long way in establishing what and who your company is gonna need. Freelancers vs Fixed Employees From the beginning, a freelancer is an employee that is hired to do work for a defined period of time, in which there’s no legal contract, and so any benefit such as sick leave, vacation, mental, vision, dental and all the other health insurance benefits is not given. They work independently on their own time frames and usually per hour, project or task. While a fixed employee is someone that you hire based on a legal contract, which should work according to your specified rules and standards and the working time is the normal business hours. A fixed employee has the right to sick leave, health insurance, vacations, paid time-off and in some times unemployment in case of layoffs(as the case maybe). Fixed employees are completely under your total control, as they should not decide on any matter on their own and all that they do will be for the sole benefit of the company.

Freelancers generally have the following advantages Low overheads- You simply pay for their time More flexibility Greater quality- Generally. But you still need to consider other things More options- Geography is not a barrier to talent Industry-standard and best-in-class quality Risk reduction And also these disadvantages Unpredictability, unavailability and unresponsiveness Networking and relationship limitations Higher wages- They normally increase pay as time goes on or if they are living in costly places like London, Hong Kong, etc Challenges in establishing company culture Fixed employees do have the following advantages Loyalty Develop company culture Good clientele relationship You have complete control over them Disadvantages An average workweek of 40+ hours is very exhaustive- Especially without motivation Greater requirements for employee training Increase in labour cost- All the benefits, insurances, etc

By comparing what a freelancer is, and a fixed employee, it’s clear that they both fall into a specific role that can only be considered under specific conditions. These conditions are the primary deciding factors of what things are to be. Below is a list of the factors that may lead to deciding whether a freelancer or a fixed employee is what your company needs in order to put things together and get rolling. Your primary goals. What you want and how you want to achieve it Your resources. Are you up for a big company with more productions or services or is it just a small team of workers that want to get a project completed Do you want to establish a company culture with defined values and standards Do you want to tap the latest, exclusive and state-of-the-art skills and expertise Do you want to increase diversity Do you want to increase savings while making fewer responsibilities and less supervision Your company status: is it growing rapidly or you just have a steady work The company’s financial ability

When you have all the information that you need, which includes all the information about freelancers and full-timers that you just read above, your company information, it is then left for you to carry out decision-making and see which option will be more economically viable. Below is the “whens” to consider while deciding to hire full-timers or freelancers.

Consider Hiring a Freelancer When: Consider Hiring a Fixed Employee When: you want to source for a specific talent you have long term and in-depth projects you want to get a best-in-class service you want to develop workplace culture you have a project that needs to be done in a tight deadline you want employees with greater commitment to the company you want to reduce your expenses on labour you want to develop good clientele you don’t want the risk of legal requirements your company is flourishing with business you want to get a wider talent base and an access to an expert skill set

Have a specialised work

Whether you should hire a freelancer or a fixed employee depends greatly on the current needs of your business. Just starting up and need to keep costs down? A freelancer (or multiple freelancers) who can tackle tasks at a lower price point is probably the way to go. Have a more established small business looking to cement itself in the industry and grow sustainably? An investment in full-time workers will trump short-term contract hires. Ultimately, the tough decision is a matter of establishing your company’s future goals. Making Your Decision If you’re looking to fulfil a need within one project that is very technical, then there are hundreds of freelancers that specialise in that domain, you just source one, two or as many as you like and they can hit the nail on the head. However, if there’s a possibility that you’ll have further requirements down the line, it might be worth offering a fixed employee. The main thing to remember is to be open and honest with candidates from the start and always keep temporary staff frequently updated on your requirements

Either way, your business will suffer if you don’t consistently evaluate your decisions and determine when each type of talent makes the most sense for you. Keep an eye on your bottom line and you’ll have a better idea of when to go freelancer and when to go full-time.


Till Carlos

I'm Till, a senior developer who started a software company. I explain software concepts for people in supervising / leading roles.