#74 Should you engage an employee or a contractor?

Have you been wondering whether you should engage an employee or a contractor? I’m here to help you make this important decision today.

As our businesses grow, our needs will change. We must remember that what suits us right now may not suit us later on so we have to make our decisions with the future in mind.

In this episode, I’ll explore the differences between engaging an employee and a contractor, and which one would be the best fit for your business.

We’ll look at what you want to achieve in the role, exclusivity, delegation and how we want this team member to operate in the long term.

Take this time to reflect on exactly what you need from the role. Do you want them to only work for a few hours a week? Do you want them to be a long term team member and grow with your company? We’ll run through more questions you can ask yourself to build clarity around how you envision this new person fitting in to your team.

I’ll also discuss the legal aspects of exit strategies and written agreements to make sure you have thought it through and covered everything. It may surprise you to learn that in some cases it’s more beneficial to hire an employee than a contractor when you need to end the agreement.

By the end of the episode, you’ll have a very clear idea of which one you want to engage to suit your business needs in the long run.

TOPICS DISCUSSED AND WHERE TO FIND THEM:

[0:54]: We need to get clear on whether an employee will suit the business or whether we should engage a contractor.

[1:13]: What do you want to achieve in this role?

[1:35]: Each role has different financial obligations attached to it. A contractor is paid a higher hourly rate and employees are paid a lower hourly rate but you need to make allowances for leave and superannuation.

[2:37]: A Virtual Assistant is a great example of a contractor that is only needed on an ‘as needed’ basis.

[3:22]: Do you need someone exclusively for you? Is it important that the individual you engage is the individual that carries out the task? What’s your long term vision for the role?

[4:35]: Contractors don’t have an easier exit strategy than an employee. Whichever way you go, you must record the agreement in writing. You will need to provide notice to contractors under the contract terms.

[8:13]: Focus on precisely what you need this new team member to do for you, their commitment and skillset, whether they can delegate and whether they need to be exclusive.

[9:29]: If you want to set yourself up for a positive smooth working relationship, you must have the agreement recorded in writing, tailored for your business and the role, from the very beginning.

[10:40]: Check out our Resources page to learn more about a range of topics that are very important for small business owners.

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Resources mentioned: