The golden years for employees and thier families was after WW2. Most workers in the developed world earned enough to raise a family, buy a house, a car, maybe a boat, and to take the family on holidays once a year. For most couples, only one partner had to work. It’s no wonder they told us to work hard at school and get a good job. They thought as soon as you got out of short pants at the bank, and got your legs under a managers desk, you were set for life.
I remember being told in the 1990s that the world was changing, that most people will have two or three different types of jobs in the future. They would have to “retrain”. It’s sadly quaint in hindsight. Most of us now dance and “pivot” seemingly all the time. It can be like surfing: paddle hard, jump off before the wave ends, sometimes fall off, periods of time sitting looking out to sea. A lot of us love this, you get to wear shorts a lot, but it makes things hard if you’re the one that wants to engage people to help you. When you run a business you can choose between a range of ways to engage people. I am assuming, if you’re reading this, you are fighting a war for good talent and want to keep your people happy.
You can employ people, like in the old days, but have to manage mostly fixed levels of cost when your income might vary, You can engage independent contractors but they cost a bit more because they spend periods of time not working, waiting and paddling for waves. They often work for other people and might not be available. You can use a contracting company like Upwork; there are pros and cons for that. Or a local bricks and mortar employment agency that supplies contractors. Or you can outsource tasks to another business, like us, and let them deal with the issues.
We have all been watching the contractor verses employee (with benefits) clashes. Uber in California and the UK for example. It looks like employing people is going to keep getting even more complex not “simplified”. When I worked as a CFO 20 years ago I always did the management payroll, I wouldn’t dream of it now. Working in a payroll company has shown me just how complex everything has got. I honestly believe that employment complexity is seen as a competitive advantage by large companies, just like complex phone plans, and that should make us all sad.
What is critical if you run a business, and I say this with my CFO hat on, and my big boy shorts on, is that you make sure all of these different types of costs are captured in your performance reporting. I have seen many a good profit result ruined by a contractor that didn’t send in their invoices for 6 months. Make sure your contractors use your time systems, and make sure those systems allow you to accrue costs each month.
That way you won’t get caught short.