Imagine that you would like to hire someone to perform key human resources activities for your business. You are not sure whether you would like to hire an employee or an independent contractor. Discuss some of the pros and cons for each option and decide which would be better for your company.

Hiring an employee vs an independent contractor:

1. Hiring an employee:

Pros : a)There is always a sense of belonging that a hired full time employee will feel.

He or she will be more invested in achieving vision and mission of your organization than an independent contractor or a freelancer will.

b) You can always do succession planning when it comes to full time employees.

c) You can completely direct and control the way the employee is doing the work.

d) The costs incurred are more predictable.

Cons: a) Various types of costs are involved when it comes to hiring a full time employee . Like health insurance , paid leaves, free vacations etc.

b) It's difficult to terminate a full time employee in the periods of financial cruch or slow growth as this instantly portrays the financial health of the company as being poor in front of the public .

c) Pay checks will always be due no matter if the business is not doing well.

d) Legal paperwork is a must.

e) Payroll taxes are applicable.

Independent Contractor :

Pros :

a) Although hourly costs are high but overall costs incurred in hiring an independent contractor is low as the company is not binded to provide any benifits or perks whatsoever .

b) The company doesn't have to agree on a fixed salary.

c) You can always terminate the contract in times of slow growth and it won't affect the image of the organization.

d) You can hire different contractors for different projects specifically keeping in view the specialized KSA you need.

Cons :

a) You will have very little control over how the contactor goes about completing the task. You can only question the results.

b) Since there is no sense of belonging, because of them not being a part of your team , you can't expect them to be loyal to your business nor can you expect them to promote your brand.

c) Getting a same contractor for your next project might be a bit difficult.

d) All the copywrites would be owned by the contractor unless a proper agreement is signed.