Advantages of Hiring a Freelancer

I have begun to compile a list of reasons why business owners should hire 1099 freelancers as opposed to W-2 employees, and I have called it "Advantages of Hiring a Freelancer":

- No need to provide healthcare benefits
- No need to pay tax contributions
- Spend less on gas; spend more on other areas of economy
- Less time lost commuting in traffic; more time to work
- No need for middle management
- Communicate instantly via IM, Email, Text Message, etc.
- Communications can be saved for later reference
- Pay only when work is needed (eg. flat-rate or temporary hourly vs. salary employee)
- No need to worry about firing, paying unemployment, or COBRA after the work is complete
- I can work nights and weekends if I want and you don't pay overtime
- More productive, happy, and possibly long-term working relationship
- Leverage; I reserve the right to sub-contract other highly-specialized and talented freelancers to help get the job done quickly if necessary
- Save on office space
- Save on equipment costs

This is just what came off the top of my head, but I'm sure there are more.

See if you can help me add to it.

Good list, I don't know if you mentioned it but paying pensions and the issue union strikes.

Here in NY alot of the corporates are doing the same. They hire freelancers under contract to work on-site and pay an hourly rate which is higher than as opposed to someone working in house but they don't get benefits.

Originally Posted by mikesmullin I have begun to compile a list of reasons why business owners should hire 1099 freelancers as opposed to W-2 employees, and I have called it "Advantages of Hiring a Freelancer": - No need to provide healthcare benefits - No need to pay tax contributions - Spend less on gas; spend more on other areas of economy - Less time lost commuting in traffic; more time to work - No need for middle management - Communicate instantly via IM, Email, Text Message, etc. - Communications can be saved for later reference - Pay only when work is needed (eg. flat-rate or temporary hourly vs. salary employee) - No need to worry about firing, paying unemployment, or COBRA after the work is complete - I can work nights and weekends if I want and you don't pay overtime - More productive, happy, and possibly long-term working relationship - Leverage; I reserve the right to sub-contract other highly-specialized and talented freelancers to help get the job done quickly if necessary - Save on office space - Save on equipment costs This is just what came off the top of my head, but I'm sure there are more. See if you can help me add to it.

* no, so we just charge more to make up for it.
* "" ""
* false. i'm driving for business. now it's a business expence. now i have ot charge more.
* false.
* true
* you can do that at work, but who reliaes on that as credabilitity? they can be forged so easily.
* that's why we have meetings and signoffs that state what's discussed.
* payment is the same from the client's end. the company pays me a salary not the client.
* ??
* now people expect everyone to be on call 24/7. this hurts people.
* how so vs a firm? someone who specializes in HR is going to do a much better job at estabishing and maintaining a relationship than someone who's trying to do everything themself.
* so do firms. it's called outsourcing.
* true
* false.

there are advantages to working with freelancers vs firms, but these really don't show it.

ya they do, a freelancer can just sit at home and make a website and take Counter Strike breaks in between, good for everyone!

@dereklapp: Everything you said is true, but I was talking benefits of hiring freelancers [and firms] vs. employees of their own company. So:

- No need to provide healthcare benefits * no, so we just charge more to make up for it.

You're right we charge extra to make up for this,
but it may not be the same amount that they would pay to an employee.

- No need to pay tax contributions * no, so we just charge more to make up for it.

I meant payroll taxes (eg. in the US: federal income tax, state income tax, social security, and medicare),
but on second thought, you're right, we should be charging extra to make up for this.

- Spend less on gas; spend more on other areas of economy * false. i'm driving for business. now it's a business expense. now i have to charge more.

I'm not and that's just a slight difference between the way we do business. I do business internationally and collaboration happens online.

If you are in the United States, 100% of that business expense is deductible. You can even deduct the expense of the vehicle from your income if you use it primarily for business. So even then I would not have to charge the client for this.

- Less time lost commuting in traffic; more time to work * false.

Absolutely true. See above.

- Communicate instantly via IM, Email, Text Message, etc. * you can do that at work, but who relies on that as credibility? they can be forged so easily.

Not for credibility, but convenience.

- Communications can be saved for later reference * that's why we have meetings and signoffs that state what's discussed.

Not for accountability, but convenience. Especially when designing, it is helpful to be able to go back and re-read exactly how the client described what he wants you to do, exactly what day he said he put the check in the mail, for how much, and when I can expect it to arrive, etc. It streamlines communication.

- Pay only when work is needed (eg. flat-rate or temporary hourly vs. salary employee) * payment is the same from the client's end. the company pays me a salary not the client.

If the company were paying me as a freelancer, they would only have to pay as work is needed.

- No need to worry about firing, paying unemployment, or COBRA after the work is complete * ??

Some employers think they have all this work and so they hire an employee. If the employee is a good programmer, they usually design software that can be managed/maintained by non-programmers. The nature of the business is short-term. Oftentimes, our programs even replace other people by automating their jobs, too. Then the employer (assuming they have a conscience) has to worry about letting go this guy who has a family to feed and possibly paying out unemployment until he gets another job.

Consolidated Omnibus Budget Reconciliation Act (COBRA) is part of a bill that the United States Congress passed regarding health benefit provisions in 1986. The law amends the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage that otherwise might be terminated.

In other words, they are obligated by law to continue providing health insurance and collecting payment from the ex-employee until they get a new job.

- I can work nights and weekends if I want and you don't pay overtime * now people expect everyone to be on call 24/7. this hurts people.

I didn't say I would be available nights and weekends. I just said I could work it, if I wanted to.
On second thought, that's really none of their business and I probably won't.

- More productive, happy, and possibly long-term working relationship * how so vs a firm? someone who specializes in HR is going to do a much better job at estabishing and maintaining a relationship than someone who's trying to do everything themselves.

This list was vs. employees. In the case of a firm, you are correct.

- Leverage; I reserve the right to sub-contract other highly-specialized and talented freelancers to help get the job done quickly if necessary * so do firms. it's called outsourcing.

This list was vs. employees. In the case of a firm, you are correct.

- Save on equipment costs * false.

True! An employer would have to purchase the employee's equipment (eg. software licenses, computer, monitor, keyboard, mouse, or notebook, and various upgrades such as RAM memory) and keep it up-to-date,
but not a freelancer (or even a firm, right?)

Originally Posted by ipkx Here in NY alot of the corporates are doing the same. They hire freelancers under contract to work on-site and pay an hourly rate which is higher than as opposed to someone working in house but they don't get benefits.

Yep. I have noticed the exact same thing in Utah. That is partially what inspired me to begin a list, but also for fun.

Personally I think this is the future in which human resources is going, its difficult to find employee loyalty in this day and age, might as well cut back on some valuable resources and just hire contract employees instead.

Originally Posted by ipkx Personally I think this is the future in which human resources is going

It is very cost effective. It's like peer-to-peer networking, only in a business sense. Thanks to tools like Basecamp, Skype, and PayPal we can collaborate online even better than we could in person.

I believe it will happen to the tech industry first (it has been a growing trend for some time now) and if it works out long-term I think we will see a lot of other industries paying consultants to learn how to do this because it will be so much cheaper. One notable example is JetBlue who has been doing this with employees with a ton of success (they have a huge waiting list to get in there and rarely have openings) combined with their incredible health care benefits (I guess if you save more in other areas, you can afford to spend more in others)

its difficult to find employee loyalty in this day and age

In the Agrarian age, it was every man for himself. You were strange if you weren't self-employed and there was slavery. Most people didn't have great schools or schooling, but they received excellent education. (eg. Benjamin Franklin, Thomas Jefferson, Abraham Lincoln, etc.)

In the Industrial age, employer-employee relationships really caught on thanks to the pay and without child labor laws entire families would work together (like they did on the farm as a family before they got hired) oftentimes in terrible unsanitary conditions.

At one time, Japan was well-known for its job-security. Some employees would work for a company for all their life. That happened in the US too but it didn't take long before corporate "Downsizing" was the new trend.

Since then we've had scandals like Enron, and failures like Social Security. But naturally employees have gone through the public education system and been thoroughly 'broken-in' as to think that if they can't keep a job there must be something wrong with them. I never learned how to start a business, invest, or do web design/development when I was in school. I never even learned to write checks in school. That may be changing slowly now though thanks to humanitarian efforts by Robert Kiyosaki and others, though.

see also: How Public Education Cripples Our Kids, And Why
http://digg.com/programming/How_Publ..._Kids,_And_Why

Now we have corporations outsourcing work to other countries, a war, and subsequently skyrocketing gas/oil prices.

"For many American employees, the past years have not been easy. Jobs have left the country and good-paying jobs are harder to find. Globalization is a fact of life now.

It used to be you could work hard for one employer, save your money, and retire with decent dignity and security. Today, young and middle-aged alike are realizing that their dream of having a job with a company forever is an illusion. Just read Google News and you will see companies downsizing, rightsizing, and capsizing more now than ever before. Maximum corporate profits are the order of the day. Even the federal and state governments are getting into the act with layoffs and attrition of jobs.

In addition to all this uncertainty and mutual lack of loyalty, many workers also have to face uncertainty in promotions (even if they keep their jobs) due to the shrinking number of management positions. Then there are those long lines at airports and long commutes in rush-hour traffic and having to put up with a frustrated, bad boss who, spelled backwards, is that double S-O-B.

Finally, with both spouses away from the home most of the day, we have more children fending for themselves until their parents get home. There is thus less discipline. I wonder if some of the problems that occur in school today aren't caused, in part, beacuse many parents aren't home to take care of their children and supervise them properly."

liberally borrowed from a book I recommend very much: "Lower Your Taxes--Big Time!" by Sandy Botkin, CPA, Esq.
http://www.amazon.com/gp/product/007...lance&n=283155

With divorce and old age we have lots of employees having to work two jobs to stay afloat. An old lady works at my local grocery store as a bagger--she bags my groceries and offers to carry them to the car for ME! HOWS THAT FOR A 180-DEGREE TURNAROUND FROM WHAT YOUR PARENTS WERE USED TO?

Things are different. IMHO, employees are getting the shaft. If you are an employee reading this, don't quit your job... quit your OTHER job and start a part-time home business instead. I promise you it will be much more profitable and you will get all kinds of tax deductions (in the US anyway) for doing it. Once you learn how to run the business profitably, then you can quit your day job

also recommended: Rich Dad's Before You Quit Your Job : 10 Real-Life Lessons Every Entrepreneur Should Know About Building a Multimillion-Dollar Business
http://www.amazon.com/gp/product/044...lance&n=283155

Originally Posted by ipkx Personally I think this is the future

Yeah, me too. It's like the Agrarian age, where families all worked together from home. Except now instead of human slavery, we've got machines to do the bulk of the work for us.

That's good because our teens are getting so lazy I do not think they could do the work if they had to.

Your last post was a good read, it mirrors a lot of my sentiments.

I like your list at the beginning, good stuff!