Why Do Freelancers and Contractors Get Paid More? 5 Key Reasons

freelancers charge double, shocked with money signs covering eyes
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Why do freelancers Get Paid More. Should they really be making twice as much money?

“$500 a day? I pay my employee $250 a day to do the exact same task.” Surprisingly, it may be the $500 a day freelancer that’s a better deal for your company. In this article, I’ll go into detail about why freelancers charge twice as much money per day, and why they’re actually a bargain. You’ll be looking into ways to incorporate freelancers into your business by the end of this article.

Would you rather watch vs read? Watch the video below!

1.    Business owners can simply cut freelancers/contractors a check

When you hire a freelancer, there isn’t any 401k matching, health insurance, dental insurance, social security tax, payroll tax, workmen’s compensation, unemployment insurance, paid vacation, sick days, or personal days. Once you eliminate those factors, the pay difference shrinks considerably. An employee who is paid $30,000 a year on average costs employers $44,000 once these factors are included, a 46.6 percent difference.

a piggy bank saving money by hiring freelancers
pinterest pin 5 reasons freelancers earn more and why you need to hire them

 2.    If work is slow and times are lean, you don’t have to pay freelancers a penny.

When hiring full-time employees, you need to pay them year-round, even if the budget is tight or there isn’t work for them. There’s not the same issue with freelancers. You may need an extra person briefly to meet a huge deadline or to deal with increased holiday business. Some freelancers are willing to work less than 8 hours (often remotely), so you could hand off a 5-hour project to a freelancer.

The recruiting process for a full-time employee is time intensive, and there’s pressure to find the perfect person. If a freelancer isn’t any good, you can choose to never use them again. If they’re great, you can hire them as much as you need them. Since freelancers aren’t guaranteed paychecks, sick days, etc., they need to charge a bit more to survive. They need to budget some money so they can weather times when no work is coming in.

3.    Freelancers can provide essential equipment and tools. They get paid more in part because of what they can provide.

camera equipment and tools like this is why freelancers charge more

If you hire a professional photographer or videographer, they’ll often bring $5,000, $10,000, even $20,000 worth of equipment with them. Hiring on a videographer full time and buying the equipment they’d need would be an enormous cost. Freelancers can also bring computers and software as well. Personally, the software I bring and work on costs several thousand dollars, but the business never needs to worry about buying software and trying to expense that all out.

4.    There’s no need to create a permanent space for the freelancer.

Creating a permanent space in your office is an expense. If the office runs out of room and workstations, they’ll need to move to a larger location. Businesses can have an area set aside for a variety of freelance positions. There’s also the ability to have a freelancer work remotely, requiring no space.

They can still be in constant communication with everyone via channels like Slack, conference calls, and phone calls. Screen sharing makes reviewing work simple. A study from the Harvard Business Review found 91 percent of employees feel they’re more productive working remotely. Businesses that are skeptical about hiring people to work remotely can test this arrangement for a few days and see if the output, communication, and finished product are at a desired level.

5.    Freelancers work harder than your average workers.

freelancers work harder, that's why they charge more

Studies have found that employees slacking off costs businesses in the U.S. $15 billion per year. Long-term employees can feel bored and disengaged with their work if they’ve been at the job a long time. Water cooler chatting, gossip, and cat videos can have a serious impact on output. When freelancers come in, they often are working on a tough deadline and are intensely judged on their work output and quality. Freelancers won’t get hired again if they aren’t focused, driven, and producing high quality-content quickly.

So, should we just hire all freelancers? Is it even worth hiring regular employees?

Does this mean you shouldn’t hire regular employees?

Definitely not.

It’s important to build a talented team of people who work well together and can finish your tasks. There are also a number of positions that require someone working full-time.

If there’s a position where someone is truly needed 40+ hours a week, it will make sense to hire a full-time employee to fill that role.

If you have an employee that’s swamped and has too much on their plate a freelancer can help them with their workload until the workload backs off. Do you need an employee for a short period of time on an as needed basis? Freelancers can help you with that. What if you need a specialist on occasion? Hire a freelancer. How about if you have a crazy time of year where the workload is significantly higher. Having high quality freelancers in place can help take this burden off of employees and keep things running smoothly.

It’s important to create connections with talented freelancers so you have high quality professionals lined up BEFORE you’re in crisis mode.They’re a valuable asset that can help your entire team achieve success.

Conclusion: Freelancers charge more and they’re worth every penny

I’ve laid out why freelancers charge more and why they’re actually a good deal. Contractors and freelancers can bring so much to businesses. You don’t need to pay them benefits, 401k matching, etc. If times are slow, you don’t need to hire them. They may be able to provide essential tools and equipment such as computers, software, and camera equipment.

Not only that, you don’t need to give them permanent office space and they work faster and harder than average employees. You also don’t need to go through a challenging, costly recruiting process. If you’ve heard good things about someone and they seem like a good fit, hire them to work on a short project. If they do a great job, hire them again. If not, you don’t ever have to work with them again.

We also analyzed when it makes sense to hire freelancers vs full-time employees.

Have any questions or comments? Leave a comment or you can email me at [email protected]

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Want an additional tip on saving money for your business? Your existing computer may be costing you a LOT. Watch to learn more.



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  • admin says:

    Thanks Harvey!
    I use Astra, I’m a big fan of it.
    It’s free, looks clean, and it’s really fast.

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