Freelancer vs Employee: How to Decide

“People are not your most important asset. The right people are.” (Jim Collins, author, speaker and consultant)

Knowing whether to hire a freelancer or full-time employee for any particular role is vital for the successful running of a modern business. With budgets constantly being constrained and the pressure to perform going up, ensuring you maximise your workforce is absolutely essential if you want to build a successful company.

Here is our quick guide to help you decide whether the roles in your company should be filled by a full-time employee or a freelancer.

When to bring on an employee
  • Training: If the role requires specific knowledge or a significant amount of training, it will always be better to bring in a full-time employee. While the risk always exists that you will train an employee only for them to leave, this risk is far greater with a freelancer given the fact that they are already working with multiple companies.
  • Oversight: If the role requires careful oversight, it is also a good idea to make it full-time. Freelancers work with multiple clients and as such schedule work to their calendar and not strictly to when your managers and supervisors are online.
  • Culture and brand awareness: Freelancers are exceptional at delivering on their specific tasks but may not have the same general awareness and knowledge of your company. This is important to consider especially when choosing staff who will be interacting with your clients and customers, where it’s vital they are living the company culture and fully cognizant of the nuances of the brand.
  • Recruiting a leader: Anyone who is set to take a senior role in your business should be a full-time employee, simply because these roles require someone who is fully dedicated to the business and not distracted by other roles and concerns.
When to bring on a freelancer
  • Budget: If the budget is a concern, then you should definitely be using a freelancer. Even if that freelancer is charging a premium your company will often save money on benefits such as health insurance, paid holidays, retirement annuities and bonuses, while also saving on their office space and supplies and equipment. With freelancers the company only pays for the hours worked, and dead time around the coffee machine is no longer an expense. If you find the job is larger than expected the option exists to take the freelancer on a retainer for a set number of hours each month at a set rate, which can activate even more savings. Your accountant can easily run the costs for you in each scenario, making this decision an easy one.
  • Risk: As freelancers aren’t employees, they are significantly easier to terminate should their work not be up to standard. Further, they aren’t generally considered when tallying the employee numbers for determining the size of a business, and their working conditions are not regulated by the Basic Conditions of Employment Act. In general, taking on a freelancer runs far lower risks for an organisation than hiring in a similar position. Beware however of tax and labour law rules on when a freelancer or “independent contractor” will be deemed to be a full-time employee no matter the terms of your contract – ask us for help in need.
  • Quality: For the freelancer in particular, quality reigns supreme. With their livelihoods dependant on repeat work and satisfied clients, freelancers must be the epitome of dedication and excellence in their craft. Unlike staff members whose performance might fluctuate, freelancers understand that their contracts are always up for renewal, driving them to consistently deliver their finest work.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

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Read more about the article 9 Tips for Catching CV Liars
Close up of man back with fingers crossed behind. Idea of lying on job interview

9 Tips for Catching CV Liars

“No man has a good enough memory to be a successful liar” – Abraham Lincoln, President of the United States of America, 1861-1865

 In a recent survey conducted by StandOutCV more than 50% of Americans admitted to lying on their CV. It’s a staggering number, and something that is taking place in a country where jobs are plentiful and finding work easy.

Google searches on how to lie on a CV went up 48% in 2022 alone, and searches on how to fake a job reference went up 52% in the same time.

While there is no such research on South Africa, business owners would be cautioned that a similar number is almost certainly to be expected here simply due to the tough economic conditions. The National Qualifications Framework Amendment Act 2019 makes it illegal to lie about qualifications on your CV in South Africa under punishment of a jail sentence and applicants can be made to pay back their full salary. Despite this there are a number of other ways that applicants can lie, which are not punished (e.g: past salary, job titles, and responsibilities) and which are therefore likely to be significantly more common.

9 tips for employers

It’s clear that lying on a CV is everywhere, so how can you as the employer protect yourself from this seemingly common scourge? Here are our 9 tips on what to look for to catch liars cold.

  1. What do people lie about most?

    People lie on their CVs for many reasons. Some do it to avoid being stereotyped or simply to boost their egos, while others do it for far more nefarious reasons like earning a job they aren’t qualified for.

    Studies have shown that the most common areas where people lie are: 1: Education level 2: Exaggerated salary 3: Date discrepancies 4: Job titles 5: Fake references and 6: Name dropping.

    These are therefore the areas you need to focus on the most when trying to trip someone up in a lie.

  2. Look for telltale signs 

    Look for areas where people are not being specific. For example: Dates that go from year to year instead of month and year to month and year probably indicate there is something being hidden. Have they said they have a Bachelor’s degree from a specific university but not mentioned that it’s a Bachelor of Arts or Science? Look for skills that are listed but that don’t make sense for the claimed work history – why does this typist of eleven years have brick laying as their primary skill?

  3. Check LinkedIn and other online resources

    Candidates will happily tell lies in the shadows to one recruiter they don’t know, but will they tell those lies online where all their past colleagues can see them? Unlikely. The LinkedIn version of their CV is almost certainly much closer to the truth than anything you see on paper. Double check, check other Social Media profiles, and Google for any other online mentions of the candidate.

  4. Call the references

    These days it’s much more common for people to list their friends as their references and give you their telephone numbers, but this does not mean you shouldn’t check-up. Call and have a chat, ask questions – even if these references only guide you to areas you can interrogate in the interview, it has been worth it.

  5. I vs We

    Candidates who are lying or embellishing their CV will usually continue to do so in the interview. While the use of “I” instead of “We” is not instantly damning it can be very suspicious depending on the position claimed and business they were previously hired at. Work done for larger organisations is usually completed as part of a team and if someone is claiming they did it all alone there is a good chance they are embellishing their CV or may not even know what the role entails at all.

  6. Ask questions

    Interview questions can be subtly set to probe the areas above where you don’t feel entirely comfortable. For example, instead of simply accepting dates of employment, ask the applicant to tell you again when they worked for a given company – it’s possible they could forget dates for their first job, but the most recent one is unlikely.

    Don’t be afraid to ask specifics about job titles and co-workers either. If you can, research some names off the internet and ask the candidate if they knew them. Ask about their listed skills and ask how they came to be at the level they are. Often you will find they have listed skills they definitely don’t have.

  7. Look for hesitation

    People are going to be nervous in their job interview and this should always be taken into account, but they should also be able to answer simple questions about their work. “Where were your offices?” should be met with an immediate reply. This is not a trick question, anyone who worked at that company should be able to answer quickly. It may even put the honest candidates at ease. Hesitation on these sorts of questions, or vague responses should be treated with suspicion.

  8. Request tangible proof

    The final definitive answer if you suspect someone is lying is to simply request tangible proof. They say they got seven exemptions in matric, ask them to bring in a certificate. They say they have a degree? They should be proudly able to show you copies. If they have done a TED talk they probably have a YouTube video.

  9. Trust your gut

    The last thing you should do – trust your gut. Some studies conducted at the University of California in Berkeley examined people’s gut reactions after just a few seconds of interview. Surprisingly they found that these initial uncomfortable feelings were actually more accurate than when interviewers were told in advance that someone would be lying and were trying to play detective. Admittedly, none of these studies has been wholly conclusive, but if you have done your homework, and are finding an applicant ticks the boxes above, your gut reaction may be the thing you need to make the final call.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

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Quiet Quitting and How to Prevent It

“Quiet quitting” isn’t laziness…When they don’t feel cared about, people eventually stop caring. If you want them to go the extra mile, start with meaningful work, respect, and fair pay.” – (Adam Grant, organizational psychologist and speaker)

The idea of the recently acknowledged trend of quiet quitting is not really new at all. Some people have been coming to work and doing the bare minimum since work has existed. It has, however, become a lot more noticeable and, more important, socially acceptable since the pandemic. It’s therefore unsurprising that a 2023 Gallup report states that as few as 32% of employees now class themselves as engaged at work.

As any business leader knows, workers who are only barely fulfilling the terms of their contracts in the least productive ways can be detrimental to corporate culture and bottom line, and “quiet quitting” therefore does need to be addressed.

Causes

The time spent at home with families during the pandemic has awakened many employees to what work/life balance could be like with a little more life and a little less work. Rather than being the habit it had been before the pandemic, the return to work and the daily commute now seemed unnecessary and expensive. In instances where employees were forced to return to the office, resentment built and, without meaningful communication and explanation from management, began to fester.

At its core, therefore, quiet quitting is not laziness. It’s a direct response to a perception that employees are being used and that management does not really care about their needs, desires or hopes. If they don’t care about me, why should I care about my job?

What can be done?
  • Reward employees adequately
    The first step toward making an employee feel valued is to actually value them. Resources on the internet make it extremely easy for employees to see what other companies are paying for similar roles and if they aren’t earning the same, they will feel undervalued. Paying a good salary also leads to better employee retention, which lowers your recruitment and training costs and in businesses with small skill pools can ensure you stay ahead of the game. Your accountant will be able to assist you to determine just what you can afford to pay for each role, and how best to structure benefits to get the most from taxes.
  • Take care of employee mental health
    Those who engage in quiet quitting often state that their mental health was a critical reason why they did so. Proactively addressing your employees’ mental health needs is therefore a priority if you want them to be engaged at work.It is essential that you make sure work/life boundaries are a built-in aspect of any job. Simple rules like preventing employees from calling each other after hours, or keeping lunch hours free for lunch, will go a long way toward ensuring your employees don’t have to draw those lines themselves.

    Other ideas include matching overtime with additional time off or giving employees their child’s birthday as paid leave. Your accountant will be able to help you find funds to develop a wellness program that could include reduced gym fees or tickets to theatre, concerts or sports events.
  • Recognise hard work
    Feeling underappreciated is a large part of why people quiet quit. Working hard and having no one notice leads to people feeling unrecognised and unimportant. Make sure you acknowledge and visibly reward those employees who do work hard. With the right motivation it could even encourage others to step up as well.
  • Listen to your employees
    The ultimate reason for quiet quitting is the disconnect between management and staff. It is essential for team leaders to get to know their staff as human beings, to genuinely engage and listen and understand the challenges in their lives. People who view their bosses as caring human beings rather than faceless authority figures are much more likely to work harder to avoid disappointing their team. If they are then also adequately rewarded for doing so, this can lead to a strong positive spiral of effort.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

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Read more about the article Effective 1 March 2023: New Earnings Threshold and National Minimum Wage
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Effective 1 March 2023: New Earnings Threshold and National Minimum Wage

Employers and employees need to keep an eye on the annual increases in both the National Minimum Wage and the Earnings Threshold, summarised below for your convenience. Both are effective from 1 March 2023.

The National Minimum Wage increase

The National Minimum Wage (NMW) for each “ordinary hour worked” has been increased by 9.6% from R23-19 to R25-42. Workers who have concluded learnership agreements in terms of the Skills Development Act are entitled to a sliding scale of allowances.

Domestic workers

Domestic workers were brought into line with the NMW in 2022, and assuming a work month of 21 days x 8 hours per day, R25-42 per hour equates to R4,270-56 per month. The Living Wage calculator will help you check whether or not you are actually paying your domestic worker enough to cover a household’s “minimal need” (adjust the “Assumptions” in the calculator to ensure that the figures used are up to date).

The Earnings Threshold Increase

The annual earnings threshold above which employees lose some of the protections of the Basic Conditions of Employment Act has been increased by 7.6% from R224,080-48 p.a. (R18,673-87 p.m.) to R241,110-59 p.a. (R20,092-55 p.m.).

“Earnings” (for this purpose only) means “the regular annual remuneration before deductions, i.e. income tax, pension, medical and similar payments but excluding similar payments (contributions) made by the employer in respect of the employee: Provided that subsistence and transport allowances received, achievement awards and payments for overtime worked shall not be regarded as remuneration”.

Some employees enjoy only limited BCEA protection even if they earn below the threshold – notably any “senior managerial employee” (“an employee who has the authority to hire, discipline and dismiss employees and to represent the employer internally and externally”), any “sales staff who travel to the premises of customers and who regulate their own hours of work” and any “employees who work less than 24 hours a month for an employer”. Take specific advice for details.

The threshold also impacts on some of the protections provided in the Labour Relations Act –

  • Employees earning less than the threshold, if contracted to a client for more than three months through a temporary employment service (“labour broker”) are deemed to be employed by the client unless they are actually performing a temporary service.
  • Fixed-term employees earning below the threshold are deemed to be employed indefinitely after three months unless the employer has a justifiable reason for fixing the term of the contract.

Turning to the Employment Equity Act, employees earning over the threshold can only refer unfair discrimination disputes (other than disputes based on sexual harassment) to the Commission for Conciliation, Mediation and Arbitration (CCMA) with the consent of all parties. Otherwise, they must go to the Labour Court for arbitration.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

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