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Gig Economy – Is it Better to Hire Staff as Employees or as Self-Employed Contractors?


This article has been submitted by Peter Lynn and Partners

Q: “The “gig-economy” is frequently mentioned in the news and as a small business owner, is it better to hire staff as employees or as self-employed contractors?”

A: Employees provide a much greater certainty in knowing what resources are available, when and with what skill-set.

This not only enables you to plan more accurately but it gives you greater control over what tasks are carried out, by whom and how much it will cost.

As an employer it is worth noting you will have statutory obligations to uphold such as holiday entitlement, termination notices, working hours, maternity & paternity pay plus many others.

In contrast, while self-employed contractors mean fewer statutory obligations for employers and greater flexibility to provide work based on customer demand, there is no guarantee the person will be available when you need them.

Also, if the work becomes “regular”, you may run in to employment law problems.

On the other hand, there has been a marked increase in the “gig-economy” – the term for temporary work on a self-employed basis – and many businesses see the benefits of recruiting in this manner.

More and more people – from graduates to recently retired – are setting themselves up as freelancers in this “gig-economy” enabling businesses to tap into this resource for skilled workers on a flexible basis.

With that in mind, the Taylor Review is likely to outline changes to the designation of workers, so it is prudent to seek advice before deciding what approach is best for your business.

Hiring staff is an exciting time, but regardless of whether you term the relationship ‘employee’ or ‘self-employed contractor’, it is the substance of the contract that is most important.

To discuss your recruitment needs or to review existing agreements, contact our Employment & HR specialists on 02920 600799 or email [email protected]