According to the Bureau of Labor Statistics, more than 53 million American workers (one in three) now earn money from freelance jobs. Many individuals like working as freelancers because they get to create their own schedules and earn extra money.
Companies also have several good reasons for hiring a freelancer over employees. If you don’t use freelancers already, you should think about these four ways that hiring freelancers can save your company money.
Hiring a Freelancer Saves Your Company Money
You Spend Less Money on Real Estate and Equipment
Every employee who works in your office takes up several feet of space. The fewer people you hire, the less money you have to spend on office and work spaces.
By using freelancers, you also get to avoid the expense of buying equipment for more employees. After you consider the costs of computers, telephones, desks, and chairs, it becomes obvious that you can save thousands of dollars by using a freelancer instead of hiring a new employee.
Take back control of your finances!
Get a FREE checklist for the money moves to make in the New Year.
Also get new articles, advice, and tips delivered right in your email inbox with our newsletter!
You Avoid the Expense of Training Employees
Training new employees takes a large investment. In 2015, large companies spent an average $12.9 million on training. Small companies spent about $350,300, and midsize companies spent about $1.4 million.
One of the great things about hiring a freelancer is that he or she already has the skills that you need. Instead of spending money on training, you get to hand over a project to an expert who knows how to do the job well. In other words, you could shave thousands of dollars from your budget while getting higher-quality work.
You Don’t Have to Give Them Benefits
Benefits like vacation time, health insurance, and 401(k) contributions account for a sizable chunk of the compensation you give your employees. In June 2016, employers paid their workers an average $23.35 per hour. They spent $10.70 on top of that for benefits. Benefits, therefore, account for over 30 of each employee’s compensation package.
Many freelance workers expect to get paid slightly more per hour than full-time employees who receive benefits, but you’ll still save a significant amount by using freelancers. QuickBooks will help you keep track of how much you pay your freelancers, so you’ll see how much you saved at the end of the year when you fill out 1099 forms for the IRS.
You Pay Freelancers Only When They Work
Your full-time employees get paid even when they don’t have a lot of work to do. Unfortunately, that means your business spends a lot of money on compensation even when you don’t have much revenue coming in.
When you hire freelancers, you pay them only for the work they do. During business periods, you can afford to bring more freelancers on board to keep up with demand. When business slows, you can use your freelancers less to avoid spending more money than necessary.
Your business needs some full-time and part-time employees, but you don’t have to give a permanent position to everyone who works for you. If you want to cut your business’s expenses, using freelancers makes a lot of sense.
Companies have several good reasons for hiring a freelancer over employees. What do you think? Did I miss any other good reasons for hiring a freelancer?