When a company grows beyond its means, it is time for managers to sit down and address the debate over whether it is within their best interest to outsource jobs, or hire direct employees. An article on The Green Sheet outlines the pros and cons to each.

Some hiring hurdles specified in the article include:
• Insurance (health, workers compensation, etc.) - This can be costly to an employer.
• Managerial Time - It is important for managers to be prepared for new employees with immediate tasks, training materials and direction. This will help reduce wasted time for both the managers and new employees.
• Office Expenses - New employees will need a place to work, which includes supplying a desk, chair, computer, business cards, phones, etc. These can add up to substantial expenses.

Some cons of contracting include:
• In the long run, in-house employees might be less expensive. Employees may appreciate the guarantee of a regular paycheck and take more pride in their work.
• It is easier to part ways with an employee is the relationship goes sour. Often times, contracts have clauses that allow for compensation in perpetuity.
• Misclassifying an employee as a contractor can lead to severe penalties. There are federal and state laws containing clear definitions of these terms and employers can face substantial financial backlash if they are not careful.

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