Subcontractors vs Employees: Which One is Best For Bookkeeping Businesses?

Should you hire an employee or a subcontractor for your bookkeeping business? Co-hosts Hannah Robinson and Melissa Honan break down the difference between hiring an employee and a subcontractor, their pros and cons, and when it makes sense to go with either.

• Melissa starts the conversation by describing the difference between hiring employees and hiring subcontractors.
• Melissa explains why it's important that subcontractors and employees be held to the same performance standard.
• For Melissa, performing a task audit is the first step to understanding whether you need to hire an employee or a subcontractor.
• Hannah and Melissa go through the difference in workload for sub-contractors and employees.
• Melissa breaks down the steps to making a successful first hire in your small business.
• Melissa believes it's more beneficial for your first hire to be a subcontractor than an employee while you figure out what you want.
• Hiring and onboarding is expensive. To help increase the odds of a successful hire, Melissa believes all new team members should go through a 90-day probationary period.
• According to Hannah, the most effective way to reduce employee turnover is to make it clear from the beginning that you're investing in a long-term relationship.
• Melissa adds that the goal of every successful hire is to be clear on the level of commitment you expect from the new team member.
• Melissa highlights that employees don't like too much freedom - as a business owner, you must set clear expectations, rules, and processes.
• Hannah describes how having a well-defined business structure leads to increased productivity.
• While there's no way to guarantee an employee stays with you long term, Melissa believes maintaining a positive work environment will increase their odds of staying.
• Hannah and Melissa share the pain of investing in an employee only for them to move on.

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