Are you still trying to do it all yourself (or with the help of a few freelancers or contractors)? For many small-business owners, there comes a time when you need to hire “real” employees. Here are nine signs that time may have come for you.
1. You’re Missing Deadlines and Deliverables Dates
Regularly falling behind on important deadlines, shipments or other deliverables is a major warning sign that your current system isn’t working. If you can’t catch up by adding more contractors, hiring might be a good solution.
2. You’re Spread Too Thin
Handing work off to independent contractors or freelancers may still leave a lot of burden on your shoulders. Working with freelancers require finding those people in the first place (sometimes on short notice), giving them assignments, providing guidance and setting expectations and then following up to make sure they’re progressing. You may also have to deal with the hassle of paying their invoices and reporting them appropriately on your taxes. All things considered, outsourcing may not really be saving you that much time.
3. You Keep Getting Left in the Lurch
Dependable freelancers and contractors are like gold—but there’s plenty of tin out there, too. When you rely solely on outside people to get your work done, you may not know that things are going wrong until it’s too late. If contractors and freelancers have dropped the ball on you one too many times, it may be time to hire in-house employees you can keep an eye on.
4. You Want Workers Physically on Your Premises
Having freelancers or independent contractors work on-site can put you in hot water with the IRS because it may blur the lines of the employee vs. independent contractor distinction. However, sometimes working remotely just isn’t practical. If you need employees on the premises, you may want to think about recruiting and hiring your own staff.
5. You Need More Accountability
You never know what other projects independent contractors or freelancers are working on. What if their biggest client (read: not you) suddenly has a rush project that takes priority over your work? What if your key freelancer wants to take a month-long vacation? When you need to know that workers are giving your business their all, it may be recruiting season for your business.
6. You Want People to Do Things Your Way
Providing training and guidance to freelancers or independent contractors can be a slippery slope. The IRS may take a dim view if you have too much control over how independent contractors perform their work. If you have them use specific equipment, provide them with tools or train them in how to do something, the IRS might determine that they’re actually employees. If you need your workers to do something in a very specific way or learn proprietary techniques you don’t want to share with outsiders, it’s may be best to start recruiting and hiring employees you can teach.
7. You Realize Using Outside Contractors Is Becoming Too Costly for Your Business
Hiring freelancers or contractors may not always be the cheapest solution to your staffing needs. This may help you decide if it's a good idea for your business: Regularly run the numbers to assess how much these people are costing you—then compare that information to the going rate for employees doing similar work. (Remember to include the cost of any employee benefits you'd be offering.) Sometimes, you may find the costs are so similar, there’s no advantage to using outside workers.
8. You’ve Identified a New Opportunity You Can’t Handle Alone
Sometimes, you’ll see a chance to expand your business by adjusting your business model—for example, adding an online component to your retail store or launching a product line to go with your services. It may be easier to take advantage of such an opportunity if you bring at least one employee on board.
9. You're Scared to Hire Employees
As small-business owners, we hear so many horror stories about employee lawsuits, red tape and government regulations that we may be intimidated by the very thought of hiring employees. If worry about what might go wrong is the only thing keeping you from hiring, you may be making your life a lot harder than it has to be. Using a professional employer organization (PEO) may ease some of your worries. These companies handle payroll, benefits, regulatory compliance and all the other HR aspects of hiring. A PEO may help you focus on recruiting, training and managing the best person for the job.
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