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Freelancer Vs Contractor Vs Permanent Employee

When putting together a team founders and managers have aslew of options available.

When putting together a team founders and managers have aslew of options available. The most common one is to hire an in-house implementation team. Others can choose to hire solely management positions and outsource the implementation team. Or, depending on the skills of the founding partners, services such as CTO-as-a-Service can be employed, typically with an outsourced project team as well.

No matter what option you go for, it’s important to understand the role in and behavior towards your business that person will have.

Who are freelancers?

Freelancers are those who work for themselves on short-term projects. While they do not receive employee benefits from their clients andmust pay their own taxes, many people prefer this option because it allows them to work from anywhere, set their own hours, and work with multiple clients at the same time.

Who are contractors?

Their schedule and work environment are more flexible,similar to that of freelancers, but they only work with one client at a time.They frequently take on large projects that can last weeks, months, or even years.

Who are employees?

Employee are the in-house people. They work for a single company on a long-term basis and are given a set wage, such as an hourly rateor an annual income. Their working environment and hours are usually determined by their company.

What sets them apart?

Contractors and employees typically work on one large projector for one large customer, whereas freelancers have the option to work on several projects and with multiple clients.

Freelancers usually take shorter projects than contractors and employees fill a specific role in the company.

While companies handle both tax contributions and benefits for their employees, freelancers and contractors are responsible for their own payments and do not receive any compensation from their clients.

Who are we missing? The augmented staff and outsourced project team. They are the people already employed by a company, who get assigned work for other companies. Experts-as-a-Service you may call it. Everything having to do with their hiring and retention falls in the hands of their company. You just invoice that third party based on agreed rates.

We wrote an entire article about them. You can delve into it here.

There are different ways in which you can source talent. The key is being strategic with your choices and having clear priorities and results in mind. With the rise of remote work, there are better and better tools to build and work with global teams that can cover any timezone and culture. Building that right mix of skills and knowledge is no easy task. But the payoffs when done right, are huge.

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