There are many good reasons why your company should consider hiring freelancers.
Hiring a freelancer is normal for many businesses today. Particularly in America, the use of freelancers is extremely common. But Europe is starting to come along. Read about the development in Europe & America here.
Why are freelancers so popular? Because businesses need flexible workers. Flexible workers can perform specialized tasks and increase capacities in high-season times.
In small companies, the number of employees needed at different times of the year can vary a lot. Maybe because the company operates within a seasonal business. Or it can be because a company take on a few projects larger than their capacity.
But for small companies, a few extra full-time employees may put economic pressure on the business. It may create a need to get another huge project, after project completion. But by hiring freelancers, small companies can scale their business. Scaling the business will improve a company’s capacity in a certain period. Yet, it does not put economic pressure on the company to perform on the long-term.
Large enterprises can also benefit from hiring freelancers. By hiring freelancers, they can allow themselves to minimize the number of employees. For instance within a number of specialized areas. Freelancers can instead be used to perform specialized ad-hoc tasks on an on-demand basis.
It is common practice in large enterprises to cut down on fixed costs but leave room in the budget for variable expenses. Why is this the case? Because variable expenses are cheaper in the long run and does not provide a long-term economic pressure on a company to perform.
Freelancers actually earn more on average than full-time employees, on a global scale. Read about a freelancers salary here. And now we tell you that hiring freelancers are cheaper than hiring extra full-time employees.
Freelancers are paid more, but you pay less?
How does that make sense? Let us explain.
When a company hires a freelancer, they either pay the freelancer a fixed sum or on an hourly rate. Often, the hourly rate of the freelance will be higher than the hourly rate of a full-time employee. But for a freelancer, the hourly rate is what you pay, in total. You do not pay more and you do not pay longer than you need to.
For a full-time employee, you may pay a lower base salary. But on top of the low base salary, a lot of extra costs are associated with permanent workers. Of course, these vary significantly dependent on the given country and company.
In America for instance, employers have significant expenses connected with a full-time employee. This could be insurances (Medical, life, dental), annual bonuses, the company paid part of payroll taxes and other fringe benefits.
On the other hand, in most European countries, companies are not responsible for insurances. This is just one significant difference of expenses between Europe and US. Be aware that in each country, the rules might be slightly different. Expect therefore the costs to be different as well.
As a result, there is no universal way to calculate the price of employees.
A company will though typically experience expenses of full-time employees in relation to:
Sicks days, pension, maternity leave, office supplies, staff training, meals, entertainment, equipment, computer software licenses, travel expenses and many other fringe benefits and overhead expenditures.
So remember to do your calculations right. You need to consider all costs. Sometimes a permanent employee may be the solution to your problem. But often, you will find that freelancers actually cost you less.
Finally, the 5 reasons your company should hire freelancers:
To sum up, we will encourage your firm to consider these 5 reasons for hiring freelancers:
- With flexible workers, you can perform specialized tasks and increase capacities.
- Freelancers keep your business competitive all year round.
- Freelancers put no long-term economic pressure on your business.
- By using freelancers on an on-need basis, you can minimize the number of fixed costs associated with many employees, without minimizing your capacity.
- Hiring freelancers is cheaper than hiring full-time employees.