Pros and Cons of Using a Freelancer Platform vs. Using a 1099 Subcontractor

Perform a basic Google search and you’ll find numerous freelancer platforms. Some of the most popular options include Upwork, Fiverr, PeoplePerHour, Simple Hired, and Toptal. These freelancer platforms are home to thousands of freelance workers ready and willing to take on business tasks and assignments. If you are considering hiring a freelancer from a web-based freelance platform, know that this is not your only option. In some cases, using a 1099 subcontractor may be the better option. Here’s a look at some of the pros and cons of a freelancer platform compared to a 1099 subcontractor.

Freelancer Platforms

Pros:

  • Access to a large number of freelancers. What makes freelancer platforms so popular is that they are chocked full of talent. You will discover freelancers from all over the world who have expertise in different areas of business.
  • Cost-effective services. While freelancers have the right to charge whatever price they see fit based on the job, most freelancing services are very affordable. When hiring a freelancer from a freelancer platform, note that the platform may take a percentage of the freelancer’s earnings.
  • Maintain a low financial risk. When you hire a freelancer from a freelance platform, you will likely have protection against sub-par work. This means that if you are unsatisfied with the work, you will not have to pay for it.

Cons:

  • Unpredictable quality of work. As previously mentioned, you cannot always determine what the quality of work will be when you hire a freelancer. This means you may waste time having to find a new freelancer to redo the work.
  • Lack of training. As freelancers are essentially independent contractors, they will not receive the same level of training as a regular employee.
  • Less control and supervision. Freelancers work on their own terms which means you will have minimal control and supervision.

1099 Subcontractors

Pros:

  • Greater reliability. Unlike a freelancer who tends to work for multiple clients at one time, subcontractors usually work for one client full-time for a set period of time.
  • Expertise in specialized areas. While some freelancers specialize in certain areas, many are jacks of all trades. Subcontractors, on the other hand, tend to specialize in certain areas.
  • Act as an employee test drive. If you are considering whether or not to hire a permanent employee, consider hiring a 1099 subcontractor first to see if you really need another set of hands or if you can get by without a new hire.

Cons:

  • Higher legal risks. As freelancers tend to work remotely, you don’t have to worry about them getting hurt on your property. Subcontractors may need to be physically onsite which can increase the risk of legal issues.
  • Availability can be limited. As subcontractors tend to work with one company at a time, you may find that your go-to contractors are not always available to step in when you need them.
  • Could have worked with your competitors. As subcontractors tend to work locally, you may discover that they have worked with your competitors in the past.

There are pros and cons when it comes to both freelancer platforms and 1099 subcontractors. It is important to consider both options carefully and choose one that meets your budget and unique needs.

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Pros and Cons of Hiring a Freelancer vs. an Employee

Need an extra pair of hands to take over important job tasks? You may be considering hiring a new employee. However, this is not your only option. In some scenarios, it may be more convenient and cost-effective to hire a freelancer instead. Your choice should ultimately come down to your budget and the job description at hand. To aid you in your decision, consider both the pros and cons of hiring a freelancer versus an employee.

Hiring a Freelancer

Pros:

  • Flexibility – If your company is like most businesses, you probably have busy periods during the year and less busy periods. This can make staffing difficult as there may not be enough work to go around during the slower periods. By choosing to work with a freelancer, you can benefit from having an extra team member on board during busier times and can cut ties when business slows.
  • Specialists – Unlike a regular employee who may or may not have vast experience in a certain area, you can count on freelancers to specialize in different business areas. This can cut down on training and help ensure that the job is done at a satisfactory level.
  • Affordable – Freelancers typically cost less than hiring a permanent employee. You only pay a freelancer for the work they do and you can avoid extra expenses like paid holidays.

Cons:

  • Time-Consuming – One of the biggest downsides of hiring a freelancer is that they are not always available to take on new work. As freelancers tend to have multiple clients at once, they may not be available to take on new work and you may have to spend extra time trying to find a replacement.
  • Communication Challenges – Unlike an employee who is onsite and can be called into your office when you need to chat, a freelancer can be more difficult to get ahold of. You may need to wait to hear back via email or phone which could take hours or sometimes even days.
  • Lack of Supervision – Many business owners gain peace of mind by supervising their workers to ensure that everything is moving at a steady pace. This is not always possible with freelancers, especially those that work remotely.

Hiring an Employee

Pros:

  • Loyalty – Freelancers work with multiple businesses which means that they are not loyal to any one company. Employees have a vested interested in the success of your business and are likely to put more time and energy into making your company successful.
  • Problem-Solving – When a problem occurs, you do not want to wait around for a freelancer to get back to you. A permanent employee who is already onsite and willing to help out can help ensure that problems are dealt with quickly.
  • Reliable – While most freelancers are professionals, there is no guarantee that they will not simply disappear. Permanent employees tend to be more reliable and you can count on them to finish their assigned work on a day-to-day basis.

Cons:

  • Higher Costs – Permanent employees come at a higher cost. Along with a monthly salary, you will also need to pay higher overhead costs, taxes, office equipment, and other expenses.
  • Lack of Talent – Finding talent can often be difficult, especially if your business is located in a smaller city.
  • Employment Rights – Unlike freelancers, permanent employees have certain employment rights that you must adhere to. For example, if a worker becomes injured in the workplace, you will be responsible for paying out workers’ compensation.

While hiring both a freelance and employee can come with certain perks, it is important to weigh the good with the bad before making your decision.

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