Contractors vs. Employees
I just read these stories:
At Shyp, we are dedicated to constant iteration of our product. We look at everything we build with the lens of, how…www.linkedin.com
Christina Stembel is the CEO of one of the fastest growing startups in Silicon Valley with millions in revenue - and…www.linkedin.com
Cars are one of the most expensive assets a typical American family buys and maintains - yet they sit unused 96 percent…www.linkedin.com
and I’ve been doing a lot of thinking around employee and employer relationships. My wife works as a freelance web designer and it’s a tough gig. Yes — she gets the freedom of hours and it’s entirely up to her, but it’s extraordinarily tough paying for insurance, food, etc., on an uncertain budget. Sure — some people are able to make it work, but for many people it’s a slog. Have you ever seen those Uber ads guaranteeing a certain wage per month? It sounds pretty grand until you consider that, as a 1099 contractor, taxes are not taken into account — so at the end of the year you better have set aside 30–40% of those payments otherwise you’ll owe a big ole’ bill.
I believe that the employee — employer relationship is an oft abusive one, but it’s also a crucial relationship. If employers treat their employees like people then their employees are less likely to leave. If they treat them like shit then they’re going to leave at the first possible moment. With employees, clients are buying reliable expertise and a track record of success. With contractors, it’s less obvious whether or not you’re buying expertise and reliability is also suspect. Again — this is not always the case, but it reflects the fact that freelancers are not necessarily bound by anything except for their own needs.
While I do not believe that many giant corporations necessarily have their employees best interests at heart — the same cannot be said for small-medium sized businesses. These are companies that are truly reliant upon great teams and work. I believe that although freelancing work can be infinitely attractive compared to the large company — I’m not sure that freelancing comes out as well when compared to boutiques. It’s mainly due to collective expertise as well as depth. No single person, no matter how good, can really compete with a highly skilled team. From a logistical level it’s just not possible to expect the same level of service.
So while Uber and Lyft are companies I use — I believe that the reliance upon freelancers and contractors creates a dangerous foundation for these companies. After all, how can you expect loyalty and expertise when your employees could simply vanish the next day? How can you expect quality service when you don’t show them the same support? That’s why I don’t truly believe in the “freelance” economy — it ignores the possibility that the employer — employee relationship is something that needs work not that it’s necessarily broken.