There is a talent gap in your organisation and you have a decision to make - go the traditional employee route or hire independent talent. Pre- COVID freelancers were largely reserved for short-term, fixed-scope projects. These days, more and more highly-skilled consultants and professionals are leaving the workforce to pursue a freelance path. The choice for people at the hiring table is becoming more complex. At scale, the decision is crucial as it can significantly impact project outcomes, cost management, and overall business agility.
That being said, not every role is suited for independent talent. In this article we will provide you with a comprehensive framework to help you make informed decisions when choosing between freelancers and full-time employees. By understanding the core differences, benefits, and strategic considerations, companies can align their talent strategy with their business goals.
Let’s dive in!
Freelancers: The costs associated with freelancers are typically project-based or have a defined scope and precise deliverables. This allows companies to pay only for the work completed within the agreed upon timeframe. Freelancers are responsible for their own benefits and taxes. Additionally, if the freelancer works remotely they are also responsible for their own office expenses.
Full-Time Employees: Full-time employees require a more substantial long-term financial commitment. Companies must account for salaries, benefits, taxes, and other overheads. Depending on your work model, full-time employees often need office space, equipment, and other resources.
One of the primary advantages of freelancers is their ability to provide scalability and adaptability. Companies can quickly scale their workforce up or down based on project demands, without the long-term commitment associated with full-time employees. This flexibility is particularly beneficial in industries with fluctuating workloads or where specialized skills are needed temporarily.
On the other hand, full-time employees offer stability and continuity, which are essential for maintaining corporate knowledge and long-term project success. They are deeply integrated into the company's operations and can be more easily aligned with long-term business goals.
One of the main draws of hiring freelancers, despite the fact that they come with higher hourly rates, is avoiding the long-term costs associated with benefits, taxes, and other overheads associated with full-time employees. This often results in substantial savings, especially for short-term or project-based work. Since many freelancers work remotely, companies can also save on office space and utilities, further reducing overhead costs.
Traditional hiring takes weeks and often even months. Freelancers can be onboarded more quickly than full-time employees, leading to faster project initiation and completion. This is thanks to the many talent marketplaces that are available today. Faster hiring means significant time savings and a quicker project completion.
Freelancers operate quite differently from employees. They are often results-focused and quick to take initiative. Because of the high demands of running a freelance business, they also tend to be more productive.
In addition, many freelancers bring with them a very diverse set of professional experiences. This fresh perspective can be a huge competitive advantage for organisations as it often leads to creative problem solving and innovation.
Full-time employees are essential for roles that require long-term commitment and continuity. There is something to be said about deep expertise and lived experience within an organisation. Freelancers can never replicate that value, nor should we expect them to. Maintaining corporate knowledge is a critical aspect of sustaining long-term business relations and ensuring consistency and growth.
Company culture is also something we need to take into consideration. The truth is that culture is built by individual efforts multiplied across an organisation, and that takes time and a long-term lens. Culture is a big strategic driver and one of the clear benefits of investing in long-term employment.
The length of the project is a critical factor when deciding between freelancers and full-time employees. Freelancers are best suited for short-term, clearly defined projects that require specific expertise. Short-term doesn’t always mean weeks or a couple of months, many of our engagements at Outsized pass the six month to a year mark.
Full-time employees on the flip side are ideal for long-term projects that require deep contextual knowledge and ongoing commitment. Leadership roles and roles that drive culture are better suited to full-time employees.
Evaluating cost-effectiveness is another factor to consider when deciding between freelance or full-time employees. While freelancers may have higher hourly rates, their overall cost can be lower due to the lack of long-term expenses such as benefits and retirement contributions.
For a more in-depth discussion on the true value of freelance talent, read our latest guide: How to Measure the ROI of freelance talent.
Do you need a highly specialised skill or more generalised competencies? Freelancers are ideal for tasks and projects that require niche skills and specialised expertise. Full-time employees are better suited for roles that require ongoing skill development and permanent expertise within the company.
Consider the importance of cultural fit and long-term team cohesion. While freelancers can integrate into teams, they are often more project-focused and may not fully align with the company culture. Full-time employees on the other hand, provide a stronger cultural fit and contribute to long-term team dynamics and cohesion. This is a very role-dependent metric, but should be part of the equation when making the choice.
There is no one size fits all approach to hiring. The point is that in today’s business world, hybrid models are the best way to tackle your talent needs. Both freelancers and full-time employees have unique advantages that can be leveraged depending on your specific needs.
By strategically combining freelancers and full-time employees, businesses can build a flexible, dynamic workforce that drives growth and innovation. Platforms like Outsized can help you access high-quality freelancers and integrate them effectively into your team, ensuring that you meet your business objectives efficiently.