How to Know If You Need to Hire an Employee or a Contractor with Sarah Torres-Ferrick
Welcome to episode 50 of The Determined Mom Show. Today I have Sarah Torres-Ferrick here with me; she owns HR Circle Online. She will be talking to us about knowing when to hire a team for your business, so you can get your valuable time back.
Today Sarah will discuss; When to hire, Who should I hire? Should I hire an employee or a contractor? What is the difference? What are the benefits? So Sarah will bring so much value to our audience today. We will first discuss how she started creating her own work-from-home business in the HR Consulting industry.
What drew you into HR and all of those things?
Sarah: “I got a degree in philosophy but couldn’t figure out how to get paid to do philosophy. My dad was in government HR, and I learned about an HR internship.
I started my internship there, and that was 11 years ago. So most of my HR career has been for big government organizations during that time. My husband started his own business, and I did the business side. So for about ten years, I guess we’ve had a family business; his businesses are in the Baseball and Softball sports realm.
It was about two years ago that I was talking to him, and like any husband, he had a good suggestion about doing HR Consulting for small businesses, and he was right because I love helping small businesses.
My HR company is focused on small businesses or those with less than 50 people, and they’re probably making their first decision in hiring. I especially love helping moms like myself because I want moms to know that, you know, you started a home business, you started something, and it can grow without you sacrificing everything you loved about it.“
When to Hire, Who Should I Hire?
Sarah expresses that some people can find it difficult because there are a lot of different government agencies and states with different rules. So entrepreneurs really have to know where they’re located and their state’s rules. For example, you will have fewer restrictions if you’re in a state like Virginia. If you’re in California, you will have multiple complex restrictions. Generally, what you want to think about first, is if you’re hiring somebody as an employee or hiring as an independent contractor.
Could you tell us a little about the difference between hiring an employee and hiring a contractor?
So you should first think about yourself and what you are looking for when you’re making that leap. Are you the type of person that needs to be hands-on with the people you work with? For example, the need to oversee what the employee is doing specifically when they’re doing it, how they’re doing it, what systems they’re using, etc.; if that’s the kind of leader that you are, then you are probably going to want to have an employee. If you’re really looking to have a goal accomplished or help with a specific thing, then that’s probably going to be an independent contractor.
Reasons for needing an Expert.
Next, you’d like to look at the type of work you want. Are you looking for somebody to support you? Or are you looking for an Expert? You know you need an expert when you can’t use Youtube or Google your way into executing specific campaigns or tools.
The case is that you are an expert at these things, but you need more time to focus on client acquisition. A person can’t listen to enough podcasts to be an attorney or do it right. When you get big, maybe you bring that all in-house, but most of the time, you’ll be completely fine under most of the standards.
You know, reaching out to those experts, adding those people to your team as independent contractors. If you’re looking for support staff, this is where it can get tricky because sometimes it can be an employee.
Are you looking for someone for a long period or just a product launch? So, e.g., a launch would be the contractor, and you would want that to be an employee for a long position. If you are looking for an Online Business Manager to help you continuously for an indefinite period, that will lend more to an employee. Shorter periods tend to be Independent Contractors.
Always check your State Laws
It’s best to find out the overall rules for the state in which you or your business was created. “Let’s give an example, So I do HR Consulting in CA, and if I have a client in California, I have to make sure that my HR work is more in the strategic planning advice realm. California law might consider me an employee if I’m sitting there scheduling interviews, conducting interviews, and assessing who to hire.”
So what about the Coaching Industry? We have a lot of coaches that listen to the podcast. So what about the coaching-client relationship, is that affected by that? It could be because you want to ensure that you’re keeping yourself as a separate business entity. So you want to ensure you have properly set up business entities and keep that relationship right. So the government doesn’t want to look on your client’s website and see that you’re one of their teammates; you don’t want to advertise it like that.
When you’re coaching somebody, you’re not talking to their customers or clients but could be helping guide them with the strategic planning of their business and making decisions. That’s where you want to make sure you’re being very clear and providing advice or consulting. You’re providing coaching; you’re not telling them what to do; you’re not going to do it for them. It’s all about ensuring you’re within those bounds and keeping records of that will be helpful.
Another helpful tip is to ensure your coaching programs have a finite period, like a three-month or six-month coaching package. You can even provide the option to renew if you want to.
Hiring a VA or Expert through a service like Upwork, FreeUp or Fiverr is much safer and you can do hourly or project based contracts with Independent Contractors from all over the world. So it’s just important to pay your state taxes and follow your state guidelines when it comes on to hiring.