Should You Hire an Employee Outright or Start Them off as a Contractor?

  • March 18, 2018
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Should You Hire an Employee Outright or Start Them off as a Contractor?

Today, we’re chatting with Carissa Moutuk!

Carissa has a common problem that faces Cleaning Nation… how to hire your team right. Her debate is whether she should hire her new team members at first as a contractor or a full time employee. What you should do will always depend on the state by state regulations, but typically hiring someone on as a contractor is the cheaper option and is what I would advise to go with when your employees are on their probationary period.

The probationary period doesn’t need to be long either, it could be just two weeks and if they like you and you like them you can bring them on as an actual employee.

Some people are afraid of hiring on empoyees due to the added costs of paying workmans comp. The thing is… you can’t be afraid of this. These expenses are something you pass onto your customers and your customers know that they are paying for this added level of security knowing they are hiring someone that is licensed, bonded and insured.

You could say there are competitors hiring illegals and thus undercutting your price and you know what? That might be the case, but it still doesn’t matter.

Ultimately, you don’t want your business to be based off a price war with your competitors. If you do that, you’re never going to get those great accounts that bring in so much profit margin in comparison to work required. You want to compete on actual value and price is not part of that equation. Your customers are also not looking for a company based off price, they’re looking for someone who can solve their problems effectively where they don’t have to worry about anything because you’ve taken care of it all for them.

Resource Alert: 1099 vs W2 Employees for Your Cleaning Business

By the way, this goes beyond just hiring your employees, it bleeds into everything you do in presenting your company as the professional solution to your clients’ needs.

You should be hiring professionals to take care of all the technical stuff for you as well so you can focus on being the value provider for your business. You will want to hire a payroll company for instance that can handle all of your employee’s wages for you. In many cases these companies can provide you feedback on whether your state benefits you more from hiring contractors at first or just skipping direct to an employee hire. In addition to hiring a professional payroll company, you should be hiring a professional insurance company to handle that for you.

Now, some states offer state-ran insurance which can sometimes be cheaper than private insurance companies like it was for me in Arizona. You will need to check your state to see if they have any programs similar to my state of course.

Resource Alert: Cleaning Business Insurance and Hiring Employees

At the end of the day, a good payroll company can steer you in the right direction as to which way you should go in the contractor vs employee debate. You should be focusing on higher value tasks such as getting those team members started, up to speed and providing that premium value to your clients and customers that your brand should be known for.

Alright, let’s dive into the Lightning Round!

Lightning Round

Best advice you’ve received either personally or professionally?
Never give up on anything you want to do. Work smart, not hard.
What’s the biggest mistake you’ve made in the cleaning business we can all learn from?.
Fear of failing of not being perfect has stopped me from moving forward. Trying to move past my perfectionism is a challenge I have to overcome, I thought I would’ve had employees six months ago.
What’s one idea cleaning nation can put into practice to improve their business or their lives immediately?
I’m a huge fan of checklists. I write checklists every day and go through them as I accomplish my tasks. It keeps me organized and productive.
Thoughts? Leave a comment below!

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