Should You Hire an Employee or an Independent Contractor?

The decision of whether to hire employees or independent contractors (IC) is, ultimately, dependent on the purpose of the hire and the long-term goals of your business. There are financial, tax, and control differences between the two that should be explored if you are considering expanding your team.

Common Law Rules  (from

Facts that provide evidence of the degree of control and independence fall into three categories:

Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

Bottom line – is the relationship between the two parties between two businesses or between a business and an individual?

Make sure you’ve deliberated all of the advantages and disadvantages prior to deciding whether to retain an employee or IC. There is no one-size-fits-all guide as each business has unique needs and challenges. So, we’ll refrain from giving you absolutes but will, instead, get some thoughts out on the table for you to integrate into your conversation to determine which is best for you.

comparison of advantages and disadvantages of using employees
comparison of advantages and disadvantages of using independent contractors

The need to find top level talent, employees and contractors, will be an ongoing challenge as you grow your business. Whether you go one route or the other depends entirely on the position that needs to be filled and whether you feel that position is short lived or will evolve over time. Regardless, make sure your onboarding process and paperwork keep you in line with laws and regulations so the contract or employment relationship is a positive experience for both parties.

The experts at Strategy Driven Marketing have spent years being involved with the process of launching and growing businesses across a variety of industries. Trust us to use our experience and expertise to help you navigate the process and make the decisions that best serve your business. Contact us today to start a conversation about partnering to take your brand to the next level.