We know by now that remote work isn’t going anywhere. But if you’re new to hiring remote, you might be wondering: are there any advantages to hiring remote contractors versus full-time employees? Or how about the other way around?
Choosing between a freelance or full-time remote accountant is an important decision, and Gusto is here to help make that choice easier. Partnering with our friends at CPA Academy, we delivered a webinar titled “How to Hire, Onboard and Thrive with Remote Accountants,” featuring Jeff Phillips of Accountingfly. Jeff shared his expertise on selecting the right accountant for your firm’s needs. You can check out the full webinar here.
Named one of the “Top 100 Most Influential People” by Accounting Today, Jeff Phillips is an entrepreneur, accounting industry leader, and recruitment expert. He is the CEO of Padgett Business Services and is Co-Founder of Accountingfly, a platform for hiring remote accountants. Jeff is an expert on remote recruitment and management and has worked remotely himself for over a decade.
Jeff’s presentation centered on what’s driving the remote work trend, how it’s an exceptional solution to hiring challenges, and shared valuable insights into how to choose between freelance or full-time remote accountants.
Freelancers and the war for talent
Freelance remote workers are becoming more commonplace across a variety of industries and at many levels. You can hire freelance admins, human resources associates, sales reps, and more. Being that his expertise lies in the accounting space, he shared his targeted insights into the unique challenges the industry faces. Most importantly, he highlighted how freelancers fill in recruitment gaps.
According to Jeff, if you want to be sure you’re recruiting and hiring the best people for the job, it’s absolutely essential to have a strategy for working with remote accountants. This includes learning how to effectively hire and manage a remote workforce, leverage remote work software, and how to develop long-lasting relationships with remote accountants.
If you don’t have an immediate need for a freelancer, why should you start thinking about working with them? Jeff explains:
“What we know is that 25% to 30% of the entire US labor force identifies themselves as a freelancer. In other words, they would not take a job from you—a full-time job—if you offered it to them. So it stands to reason, if a third of the labor market is freelance, it’s in your best interest to have a freelance strategy, or you can’t win the war for talent.”– Jeff Phillips
It boils down to that all-important demand for new knowledge economy workers. Up to a quarter of the workforce—including knowledge workers like data scientists, staticians, and of course accountants—consists of professionals opting to work for themselves on a freelance basis. While millennials are driving the trend, people of all demographics are jumping on board:
“The fastest growing groups are knowledge economy workers, and the fastest growing demographic is actually baby boomers. So the freelance labor force is growing faster than the traditional workforce growth by almost four times.”– Jeff Phillips
When a quarter of the most skilled candidates will only work remotely, you can’t afford not to work with them.
The typical freelance accountant
A freelance accountant might specialize in bookkeeping, auditing, assurance, or tax prep. One might be a technical controller, a staff accountant, or a project manager. They run the gamut, from generalists to specialists.
There is something to be said though about the level of expertise a freelancer is likely to have. Most put in years of work in traditional settings before transitioning to contract work. Being self-employed is desirable, especially for those who are qualified enough to do well financially from it. So you’ll have access to some of the most talented people around.
“Millennials aspire to work for themselves. They’re there putting in five to ten years in the public accounting profession, leaving, and then finding themselves becoming a consultant or an independent contractor that’s available to you for hire.”– Jeff Phillips
The great thing about working with these consultants is, of course, that you’re saving on overhead. You’re not paying into their taxes or their benefits, and you’re not obligated to spend valuable time training them. Of course, there will be times that you need a full-time team member who can grow with you. But, you’ll likely need to hire contractors in specific scenarios.
When should you hire freelance accountants?
Deciding whether to hire a contractor or full-time employee is relatively straightforward. If there’s a critical, ongoing need for someone in your firm, you’ll want to hire a full-time employee with a W-2. You’ll onboard and train this person knowing that you’re making an investment in the long-term growth of the firm. On the other hand, if you have a short-term need for a special project, or need seasonal help, you’ll want to hire a contractor.
Jeff cited an example of seasonal hiring from his agency Accountingfly: A company had just bought another firm and had a number of complex processes to align. These included integrating time-sensitive data from one firm to another, a process that would require intense focus and technical knowledge. The project also required a lot of time spent on these specific processes, which his full-time staff wasn’t able to do. The situation clearly called for a seasonal team: someone to work on the technical change-ups, staff accountants to classify transactions, and a CPA to check the balance of all statements.
He cited another example of a client who needed three audit CPAs with construction and mining experience for a specific project. The CPAs worked with the client on every audit for six weeks. This approach worked really well for his clients because they were able to work with the absolute specialists for the job. They avoided having to train their staff in programs that they themselves didn’t have expertise in and might not encounter again for some time.
Here’s a breakdown of scenarios that call for contractors. They’re best for when you need:
- Specific expertise, such as knowledge of a particular software, to complete a job
- To blast through a lot of repetitive busy work for a season
- Temporary help while undergoing a significant change, such as acquiring another company
- Extra help for overwhelmed full-time staff so your firm can keep up without employee burnout
What you gain by working with freelancers
We all know that accounting work ebbs and flows throughout the year. Tax season is hectic, while other periods seem to stagnate for weeks or months. While you don’t want to ever be understaffed, hiring full-time employees so you have a full team during the busy months can be a big waste of resources.
Enter: the seasonal remote accountant.
“If you’re a small tax firm, for example, and you have to do 2,000 tax returns during the busy season, but you don’t have enough staff to get this done and you’re sitting here sweating because you need to hire somebody, you can go and find freelance expert tax preparers and reviewers to come in and help you with your backlog of work for three months, and then they go away. So you’re not stuck with a full-time salary. You’re just hiring a temporary resource.”– Jeff Phillips
Cutting costs, saving time, and simplifying processes are all great benefits of hiring freelancers. Of course, you don’t want to swing too much in this direction for your team’s specific needs. You value your full-time team, so you should always make sure they’re well-supported. Aim for a happy medium, leveraging the stability of full-time staff with the flexibility of freelancers.
Value your freelancers
Let’s say you’ve successfully made the transition. You’ve developed a strategy for remote work, and now you’ve hired a few great freelancers. Congrats!
Now you can shift towards your long-term remote strategy, which should include building lasting relationships with the new hires. To do this, Jeff advises treating them like team members and treating them well.
Unfortunately, some firms make the mistake of viewing them as expendable. A manager might be unapproachable or not make any effort to bring them onto the team. In a worst-case scenario, they don’t pay them on time. This will only ensure the freelancer will take their expertise elsewhere next time.
“I want you to look at them as freelance experts, not temps. Freelancers are specialists who come in, they deliver a project or a season of work and [provide] a special skill.”– Jeff Phillips
While it’s great that there’s a vast pool of talent to choose from, there’s nothing like having a stable resource of reliable freelancers you can call on again and again. So if you like their work, develop your relationship with them. It will be a much more enjoyable experience, and can turn into a profitable long-term relationship for both parties. Jeff shared how exactly to do this:
“Include them in your company culture, get them inside your team meetings. If you have five people on your team, treat them as the sixth person. They may not be here, but for a busy season, but they should be a part of your company. Be responsive, approve the requests quickly and pay them on time.”– Jeff Phillips
Learn more about the future of remote accounting
Choosing between a full-time or a freelance accountant is relatively straightforward. Simply assess the needs of your firm. If you have a short-term need or desire specialized skills for a project, consider working with a freelancer. Situations that call for a contractor include tax and auditing seasons, a period of change such as an acquisition, or any time when your full-time staff is overburdened with work. Hiring remote contractors gives you access to a pool of experienced, qualified candidates from across the country. With a quarter of the workforce being freelance, you don’t want to miss out on these hires. It could mean you lose the war for talent. Treat your contractors as valuable team members to build long-term relationships with them. You’ll be grateful you did when tax season rolls around again!
Check out the full webinar for more insights into remote accounting. We’ve also captured his insights in our posts “Why Remote Accounting Is the Future” and “Hacks for Hiring and Onboarding Remote Accountants.”
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