🚀 Why Startups Should Hiring More Freelancers and Independent Contractors

Starting a business can be a challenging task. You need a team that is skilled, reliable, and cost-effective. However, finding the right employees is not an easy task. Many companies are now turning to freelancers and independent contractors to fill this need.

In this article, we will share with you the six benefits of hiring freelancers and independent contractors for your startup.

1️⃣ Faster access to skilled talent

In today's job market, finding the right talent can be a challenge. Knowledge workers in IT, Sales, Marketing, and Operations are in short supply. However, freelancers are more accessible and have the skills you need. Freelancers are typically well-educated, with 77% of EU freelancers having a Bachelor's degree and 55% also completing graduate studies. You can easily engage with freelancers, as they have collaborative skills equivalent to most employees. They are also more accustomed to working independently with less supervision, which leads to higher personal productivity and efficiency. Freelancers are growing in number, with the number of full-time freelancers growing from 28% in 2019 to 36% of the total workforce in 2020. This growth rate shows that people with the most in-demand skill sets will be working solo in the near future.

2️⃣ Flexible hiring

Freelancers are also called the “on-demand workforce” because you can dial up talent on demand whenever you need it. The process of hiring freelancers is faster and more operationally efficient compared to traditional hiring. You can scale up a remote team to cover a last-minute project or test a new idea without worrying about what will happen in the future. You can hire freelancers for one-off projects, tasks, or deliverables, as well as ongoing hourly or retainer-based work. You can also hire them for part-time or full-time contingent contracts. The biggest advantage of hiring freelancers is that you can mix and match different types of external workers together across functions.🌟

3️⃣ Cost competitiveness

Hiring independent contractors is cheaper than hiring full-time employees because you are not covering their salary, benefits, and perks. You are also not responsible for social contributions, employer taxes, pension, work equipment, office space, training, upskilling, workplace insurance, and other miscellaneous employee overhead. A full-time employee costs the company 1.25 to 1.4 times the annual salary in the US. Employee payroll costs can be even higher in high-income economies with larger social benefits. For example, in France or Sweden, employer taxes alone average at 45%-50% of the employee's gross salary. Freelancers may charge higher hourly, daily, or project rates, but they don't have as many overhead costs as full-time employees. So, hiring freelancers can often be more cost-effective than hiring full-time employees.

4️⃣ Fresh perspective and innovative thinking

Freelancers work on various projects in different industries, which builds their knowledge across industries, functions, and operational practices. They can use this knowledge to advise and consult companies in areas they don’t have operational knowledge or first-hand experience. They can also contribute fresh perspectives and innovative ideas based on their past experience and diverse industry/professional knowledge. Freelancers can challenge your company to evolve by trying new processes, adopting emerging technologies, and expanding into new markets.

5️⃣ Avoid Long-Term Obligations

When you bring on a full-time employee, you're committing to a long-term relationship that involves paying their salary, benefits, and other expenses. You also have the responsibility of providing them with training and opportunities for skill development. In contrast, hiring freelancers allows you to avoid long-term obligations. You can work with them on a project-by-project basis, giving you the flexibility to scale up or down as needed. Additionally, freelancers often come with their own set of skills and expertise, which means you can quickly tap into their knowledge without having to invest in extensive training programs.💰👨‍💼

6️⃣ Reduced legal risks and administrative burdens

Hiring full-time employees comes with its own set of legal risks and administrative burdens, such as complying with labor laws and regulations, handling employee benefits, and managing payroll taxes. On the other hand, hiring freelancers can help you reduce these risks and burdens, as they are not considered employees and are responsible for their own taxes and benefits. Additionally, freelance contracts can be structured in a way that protects your business from potential legal disputes or breaches of confidentiality.

In conclusion, hiring freelancers and independent contractors can offer a range of benefits for businesses, including faster access to skilled talent, flexible hiring, cost competitiveness, fresh perspective and innovative thinking, reduced legal risks, and administrative burdens.

As more and more people embrace the freelance economy, it's important for businesses to consider how they can leverage this pool of talent to achieve their goals and drive growth. So, if you're thinking about starting a business or expanding your team, consider hiring freelancers as a cost-effective and efficient way to get the job done. With Cross Path, you can do it 5 times faster! Contact our team lo learn more💪🏽💻💼