5 Tips to Hiring Employees vs. Independent Contractors


Over the years, I’ve had clients ask me whether to post a job as full-time or contract. As a hiring manager, your hiring needs are specific to the type of project you need completed or a certain role you need to fill. So how do you decide whether to hire an employee or an independent contractor?

There are benefits and pitfalls to hiring either, but these five things can help give you clarity in your decision.

1. The law

Whether you hire staff or contract employees is not a matter of choice: it’s a legal issue. Regardless of what you’d prefer, there are strict legal parameters for calling an employee staff versus an independent contractor. The legal differences lie in where they work, when they work, who supervises their work, and who owns the equipment on which they work. The federal tendency toward looking at who controls the relationship is a confusing guideline, but if you understand these, it can be the best option. Before making a decision, Take a look at NOLO and your state’s guidelines for determining what kind of position you’re hiring and check with your legal team (or legal consultant) on all hiring issues to make sure you’re using hiring practices that will support your company rather than tear it down. If you don’t have legal counsel or a human resources department, your payroll service, legal consultant, bookkeeper, or HR consultant might help.

2. When and where they work

We’ve all known marketing communications projects can swell at the beginning of the year, in the summer, and during September’s rush to prepare for the holiday advertising season. So most of us have been involved in the process of hiring experts in specialty fields on a per-project basis. It certainly saves money and later layoff issues to pay contractors to work seasonally or on overflow work.

People often think that the location of work defines the difference between a contractor or full-time staff member; However, more important is the hours during which they work. If they’re hired for one project and time of their working hours is less important than meeting a deadline, you might be looking at a contractor. If they need to work during your company’s business hours, a staff employee is probably your best bet.

3. The Supervisor and equipment

The equipment being used and the person directing the project are both things to consider when trying to decide between contractor or staff. A contactor typically operates without direction from a supervisor. They work for themselves and will head the project on their own. They will also use their own equipment. Contractors often times have everything to complete the project you are hiring them to do and do not need you, the employer, to provide equipment for them.

Staff employees, on the other hand, are usually directly supervised by somebody within the company. They are often provided a computer, sample kit, or whatever they need to complete their job, upon getting hired.

4. The company’s culture

Keep in mind that corporate culture can suffer if you are hiring the wrong type of employee. I once recruited for a firm who contracted all of their PR experts. They had a hard time getting people to sign on for subsequent projects because the core team members of the PR team literally didn’t exist. Not having anyone on staff who could speak to the core of the company meant there was no way to find them employees who fit.

In the process of deciding which type of employee to hire, evaluate your culture first. If your culture is all about work-life balance and trust, then a contractor will fit right in. If the core of your culture is about long-term relationships and teamwork, you are probably going to do better with a staff member.

5. Legacy and familiarity

A similar lack of security happens with outsourced specialty departments, as well. Without someone who knows how all the gears and cogs of your business fit together, it’s extremely challenging to contract with an HR company to find you what you need in terms of job candidates, benefits packages, and communication tools. And without a large enough staff of IT, it’s very hard to make the right choices about equipment, services, and technological processes.

Now that you know which type of employee you need, I can find you well-vetted, professional candidates quickly. I’m always just a click away.