To PAYE, or not to PAYE? That is the question
From Uber drivers and web designers to freelance fundraisers, the gig economy is vast in the UK. There are currently around 4.29 million self-employed workers, and that number is growing year on year.
The appeal of freelancing has never been greater. As a result of COVID, flexible working has become the norm, and advancements in digital communication have made it faster and easier than ever to stay connected.
This begs a question: When there’s a gap in your team, should you fill it with a permanent member of staff, or a freelancer?
Here are the arguments for each.
Freelancers
Cost-efficiency: Freelancers are cost effective because:
You only pay for the work they do, which means you don’t waste money on downtime.
You don’t need to worry about sick leave, holiday pay, NI, or pension contributions. You also save on desk space, equipment, and training.
To put it in perspective, the British Business Bank estimates that hiring someone permanently on an average UK wage of £32,084 actually costs the organisation £62,897.63 a year with all the add-ons.
Speedy recruitment process: The process of hiring permanent staff can be long-winded. Sifting through applications, interviewing, and notice periods all take precious time. A freelancer can be up and running in a matter of days.
Reduced risk: Even with a perfect recruitment process, you can never be sure how things will work out. When you hire a freelance fundraiser, you can easily and quickly terminate the contract (depending on the terms put in place in the contract)
Flexibility: The beauty of using freelancers is you can hire them on a per-project basis. This allows you to mix and match talent as your projects and needs change.
Permanent staff
Commitment: A freelancer will want to keep you as a client, but the long-term success of your individual organisation won’t be their priority. A full-time employee is likely to feel more committed and motivated to add to the bottom line.
Engagement: Happy, engaged employees are crucial to the success of any charity. Research by The Institute of Leadership & Management found that 77% of respondents cited good relationships with colleagues as the most important factor in determining job satisfaction and engagement – even more so than pay.
While not impossible, it’s much harder for permanent staff to establish quality relationships with transient freelancers.
Flexible contracts: Permanent employees don’t have to be full-time. Let’s say, for example, you’re in need of a grant writer. Up until now you’ve used freelancers to write them, but you want to bring the function in house and introduce some consistency.
You have options in terms of employment contracts - for instance, fixed-term or part-time.
Insider knowledge: Unlike freelancers, permanent staff go through an onboarding process, and ongoing training. This equips them with the knowledge to:
● Answer questions from donors, volunteers, and other stakeholders
● Deal with problems quickly and efficiently
● Pick up the slack when colleagues go on holiday/sick leave
Final word
There’s no right or wrong decision when it comes to hiring freelance or permanent fundraisers. It comes down to where you stand on the factors above. If you’d like some help deciding which is better for your charity, give us a call 020 3750 3111.