Recession Question: Employee vs. Freelancer?

I have seen several questions from both the employer side and the employee/freelancer side of the equation. Really much of it is coming around due to economic conditions. Some employers are afraid to hire a full time employee so they are considering contractors and freelancers. Some people who have been out of a job for a while are looking to freelance and contract work for income during difficult economic times. I wanted to address a few of them today:

If You’re An Employer…

When should you hire an employee?

• When you have a long term need or full time
• When you need the person to work in close collaboration with your team
• When you need someone in your office every day
• When you have the talent you need locally
• When you may need to occasionally micromanage a project
• When you can’t outsource it
• When you find the right person

When should you hire a freelancer/contractor?

• When your project is short term or less than full time
• When you don’t need close collaboration
• When it may be difficult to find local talent
• When you need a specialized skill
• When you can give up micromanaging
• When you can outsource it
• When you find the right person

Bottom line: If you have a need, try to think of the best possible way to accomplish it with the least amount of hassle. You’ll find that opportunities to use contractors goes up but finding the right person for the right position is more important.

If You’re An Employee/Freelancer…

When should you take a position as an employee?

• When your stability matters more than flexibility
• When you need a steady paycheck
• When you have an entry-level skill set
• When you need to depend on a single source of income
• When the opportunity is right

When should you take a position as a freelancer/contractor?

• When your flexibility matters more than stability
• When you can afford to go weeks without pay
• When you have a mid-range to high level skill set you can use
• When you can manage multiple streams of income
• When the opportunity is right

Bottom line: Making the jump can be a scary thing but you have to first realize that everyone is scared when they do something like this. The best thing is to do an analysis of an opportunity when it comes around and try to put your arms around it without letting feal overwhelm you.

What else would you add to this list?