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A start-up owner's dilemma - Should you hire employees or contractors?

City of Edmonton's landscape
A good startup environment

After a few years of toiling hard on your small business- sticking through it in every challenge and victory- you've successfully grown it to a size that requires a little more hands on deck to keep afloat. While getting your business to this stage is a major achievement, you may be feeling overwhelmed with the common conundrum: do I hire employees or independent contractors? The first step: don't panic! You're definitely not alone in figuring out what professional relationship is best suited for your business. Whatever you decide, I recommend that your purpose for hiring anyone should come from your business needs (i.e. revenue growth, brand building, market expansion, cost savings and productivity improvement).

Here are some quick tips to help you assess whether an employee or contractor is best for your business:

  1. What is the job I need done?

  2. For the work I want them to do, do I foresee a long term or continuous workload (either full time or part time), or do I only need some experts to help complete a one-time project?

  3. For the work I want them to do, do I care about how the work would be done or only the result?

  4. For the work I want them to do, do I need them to be loyal and be only dedicated to my business, or can they also work for other companies?

  5. If I have an urgent job to be completed, do I have an established relationship with a (short) list of contractors to call upon?

  6. If I go on a long vacation, or want to do something else in my life in 3 years, do I have people who will be ready to take over the business operations?

Once you spend some time pondering these questions and forming your answers, if your needs tell you that you should employ staff members, I understand that many small business owners worry about not having sufficient in-house resources to manage all the HR and Payroll functions to be legally compliant. In my opinion, these concerns can be easily handled by hiring an expert to help you set things up, or contracting the service out, or sharing an HR resource with a few other similar businesses, or even getting yourself trained.

If your needs tell you that you should employ staff members, then hiring the right people who thrive to grow with your business becomes your next challenge. Not only do employees generate different perspectives, add new skill sets and connections to grow your business, but they are also your allies who stand by you during the challenging start-up time! If they have the desire to work in a start-up environment then you need to be sure they, buy-in into the vision of your business, are self-motivated, goal-oriented, persistent and creative.


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