Freelancers vs. Employees — Which Option Is Best For My Startup?

Nahla Davies

6 min. read

Updated October 27, 2023

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With a cost-conscious mindset that also recognizes the value of quality work, how do you balance your need to hire employees and stay within your budget?

In this article, we will discuss the benefits and drawbacks of hiring full-time workers, part-time workers, or freelancers, and how to determine which one is the right fit for your startup.

The pros and cons of a full-time worker

When your startup is successful, full-time workers are much more likely to be at hand to work late nights or put in extra hours when needed. By virtue of their deep understanding of your startup’s culture and values, they can be vital contributors to your company’s growth through their new ideas, creative approaches, and unique input. 


A full-time worker is an ideal fit for a job that requires attention on a consistent basis. Furthermore, a traditional worker will likely be more invested and responsible for the success of your startup. They will truly feel like they are a part of your team, and these employees can be specifically trained to ensure that they provide a high return on investment. Loyalty, which is always a highly prized quality in the workplace, is to be expected from these types of employees. 

By finding, hiring, and training the right employee for your company, you can get an edge on your competition while also building employee satisfaction and loyalty. The trick, of course, is in finding a dedicated employee in the first place. Illustrating this problem is the fact that 71% of hiring managers report that they have struggled to find full-time professionals skilled enough to fill their job openings. 


Furthermore, the downside of a full-time worker can be summed up in one word that many are afraid of — commitment. Hiring a traditional worker means that terminating employment may prove difficult. Companies should also expect to pay more for full-time workers with the cost of social security, health insurance, payroll taxes, and unemployment insurance.

The pros and cons of a part-time worker

The part-time worker may be the perfect answer for those working for a happy medium between the independent freelancer and the committed, loyal full-time employee. This is the perfect option for startups who don’t have forty hours of work in the pipeline but still need assistance with projects and tasks. 


The best part about part-time workers is that their hours can be increased or decreased if needed. Additionally, part-time workers are not required to have company-sponsored health insurance and incur fewer taxes. 

It’s best for startups to hire part-time employees with the honest and openly stated intention of moving to full-time if the company grows. That way, the part-time worker that is a good fit for your company will be even more motivated to help your startup succeed and earn their place. 

A strong focus on screening new recruits is essential if your startup decides to go down this route. The ideal part-time worker is involved in your company’s vision but also flexible in terms of scheduling. However, the opposite scenario can also unfold, with a part-time worker who doesn’t feel like part of your long-term vision and, as such, juggles this part-time job with numerous others. 

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Just keep in mind that part-time workers who are highly skilled are much more likely to leave you high and dry for a full-time employer. This scenario becomes even more concerning when you factor in the amount of training a new hire might need, and the chance that they may leave you for a competitor. 

Furthermore, part-time workers are more likely to be juggling other responsibilities or second jobs than full-time workers. Traditional workers who are employed with more than one part-time job may not be as adept at handling work-life balances and work expectations as the seasoned freelancer. 

The pros and cons of hiring a freelancer

Once a little-used word, freelancers are growing in size and beginning to stake their claim in the economic landscape. According to recent studies, the “gig economy” is growing three times faster than traditional jobs in the United States alone. With remote work now becoming more widely embraced, workers are realizing that they have other options. 


Besides being able to work from anywhere, the freelance worker is also ideal for a highly specified task or project of limited duration. If your company has a very well-defined end result that needs to be accomplished, this can be perfect for a freelancer. 

Furthermore, your company doesn’t have to worry about paying for things such as health care, sick leave, parental leave, or payroll taxes. The abundance of freelancers available, as well as the ever-evolving online freelance work platforms, is also great news for startups who need to have work done remotely


Freelancers do come with some significant drawbacks, however. It is highly discouraged for companies to hire freelancers for highly nuanced tasks, or for work that requires creative decision-making. It’s also best to avoid putting a contract worker in charge of a task that is directly related to the image of your new company. 

Workers who can be hired and fired on a whim are much less likely to be committed to your company’s larger vision. After all, it’s hard to expect a freelance worker to go above and beyond during a time of need without the enticement of a promotion or pay raise down the line. 

For this reason, you will have to take a much larger role in creating clear expectations with a freelancer and closely monitoring their work progress than you would with a traditional worker. Many companies find that asking freelance workers to complete and save work on the cloud is a transparent way of overseeing progress.  Cloud-based tools such as Google Docs or Dropbox, for instance, allow you to keep tabs on your hired freelancer such as when they are logged in or how much time they’ve spent on a specific task through a detailed changelog feature. 

Another potential danger of hiring a freelance worker is the issues with cybersecurity that can arise. When interviewing workers, always be sure to ask them about their online work safety practices to ensure that your company’s financial data or new ideas never become compromised. 

Hiring the right workers depends on your business

Regardless of whether you choose to hire a part-time or full-time worker or freelancer, it is absolutely crucial for you to be very clear about the expected results and contract terms prior to hiring anyone. It’s equally vital to provide your workers with measurable goals and deadlines to avoid confusion, lost time, and never-ending negotiations. 

Before hiring any sort of help, it’s important for you to truly understand what your company needs. The type of work you need to be completed, whether it’s ongoing or temporary, and the skill level involved will all help the process of choosing the right type of worker for your startup.

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Content Author: Nahla Davies

Nahla Davies

Nahla Davies is a software developer and tech writer. Before devoting her work full time to technical writing, she managed—among other intriguing things—to serve as a lead programmer at an Inc. 5,000 experiential branding organization whose clients include Samsung, Time Warner, Netflix, and Sony.