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Hiring a Temporary Employee or Self Employed Person

The number of temporary employees, whether or not working through payroll or temporary employment arrangements, has increased considerably in recent years. in addition, entrepreneurs have access to a growing army of self-employed people without employees. read more here.
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What are the advantages and disadvantages of both groups of employees?

From the start of the economic crisis in 2008, labor in a first class country has become increasingly flexible. Certainly now that the labor market is recovering again, the number of flex workers and self-employed people without employees (freelancers) is growing rapidly, according to research by the Central Bureau of Statistics (CBS). In 2016, 22 percent of the employed labor force performed flexible work; 12 percent were self-employed. In 2008, these percentages were still at 17 and 10 percent respectively.

As an entrepreneur you can benefit from this development. Certainly if you have a young and growing company, it may be advantageous to not hire permanent staff immediately. Permanent employees are usually expensive and less easy to dismiss because of their contract for an indefinite period. That's why it's wiser to deploy flexible staff first. The advantages and disadvantages of temporary employees versus self-employed in a row.

Temporary employees

Temporary employees come in all shapes and sizes. They can work on the basis of a temporary contract, for example an annual contract, or through a zero -hour contract or min-max contract. Another form of temporary work, the payroll structure or staffing structure.

Benefits:

- Flexibility in business operations
With temporary employees you can quickly respond to business developments. After all, it's relatively easy to hire a temporary employee, and if you no longer need it, you'll say goodbye with the same ease in most cases.
- Refreshing approach
Temporary employees often have a different perspective. They regularly change jobs and see many companies inside out. They aren't tied to one particular way of working and will therefore come up with refreshing ideas or initiatives faster.
- Transparent staff costs
With many types of temporary contracts, staff costs are transparent. For example, if you hire a payroll or a temporary worker, you pay a fixed amount to the payroll or temporary employment agency. Your employee is on their payroll with them, so you have no administrative hassle of payroll tax and holiday allowance. And the costs don't suddenly turn out higher in the event of illness or disability.

Cons:

- Employees less satisfied
Employees with a temporary contract are less satisfied with their job than employees with (prospect of) a permanent contract. This is the conclusion of a study by the Social and Cultural Planning Office (SCP). In addition, temporary employees may also be less involved in the ins and outs of your company. This can be disadvantageous if you expect your staff to go the extra mile.
- Low loyalty
In most cases you can easily say goodbye to a temporary employee, but the same applies vice versa. With an attractive offer from the competitor you can just lose a valuable employee. If this happens a few times in succession, you may even be faced with a staff shortage. Be worried about that.
- Stricter rules
Employees with a temporary contract are increasingly receiving protection from the government. Consider, for example, the Work and Security Act. Since the introduction of this law in 2015, it has been less easy to dismiss temporary employees in the interim. You may also only offer them three temporary contracts in two years. This is followed by a permanent contract.

Self-employed

You can hire freelancers or single pitters, as they are also called, for all kinds of purposes. From a specialist assignment for a few hours to projects of months or even years.

Benefits:

- Very flexible to
employ Self-employed people are their own boss and organize their own time. They see no problem in making long days and, if necessary, working in the evening or at the weekend. As long as you pay that time. So you can often have them do a lot of work in a short period of time.
- High quality
freelancers are generally very knowledgeable in their field. Their expertise is based on years of experience gained from a large number of clients. Moreover, they are driven and want to perform optimally with every assignment. The result is excellent, high-quality work. You reap the benefits.
- Fewer obligations: There are far fewer rules for hiring a self-employed person than for hiring temporary employees. You don't have to pay payroll taxes and you have nothing to do with holidays, bonuses, continued payment in the event of illness or the right of dismissal. You also don't have to pay an additional fee, such as with payrollers or temporary workers. The only thing that may be required is the conclusion of a model agreement. Discuss all agreements well in advance and include the details in the agreement.

Cons:

- Risk of disguised employment
A risk of working with freelancers is that the tax authorities can see it as a disguised employment. Specially if the difference between 'working on assignment' and 'working on an employment contract' isn't immediately clear. Then you can get an additional payroll tax and social security premiums, plus a hefty fine. By signing a model agreement, as prescribed in the Workplace Deregulation Assessment (DBA) Act, you and the self-employed can prevent this.
- Little control over implementation
A self-employed person is expected to be able to perform his work at his own discretion and without the supervision of a client. If he can't do that, then the Tax and Customs Administration sees this as an indication of a disguised employment contract. This means that you as a client can exercise little influence and control over how and when a freelancer carries out an assignment. You can give a briefing, but after that it's up to the freelancer.
- Higher hourly rate
The rates that you as a client pay to self-employed people are usually higher than the price for work that's done as an employee. That's understandable. Self-employed workers must pay for everything themselves, such as the premiums for pensions and disability insurance and the income-related contribution for the health insurance law. These costs are all passed on to freelancers in the price for the service provided. On the other hand, you as a client save on both direct and indirect labor costs. You don't pay taxes, premiums, holiday allowance, thirteenth month or wages in the event of illness.

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