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Startups Prefer Freelancers Over In-House Employees; Why?

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Riha John Doe
Startups Prefer Freelancers Over In-House Employees; Why?

To answer this question, first, we need to understand a little bit about the current economic situation in our country. India is one of the fastest-growing countries in terms of startups. After the 2016 Jio telecom revolution, the internet became an accessible medium to a majority of Indians. 

 

Today a lot of mobile applications like Swiggy, Zomato, Ola, Uber, Google pay, and Phonepe became widespread. A new startup emerges in India every day. Rapido emerged despite the presence of big companies like Ola and Uber. With the same business model, they made use of India’s two-wheeler density to their advantage. Such is India’s fastest-growing startup scene. 

 

But one common thing that we can notice is that a lot of these new startups are tech-based startups. This means that they can operate with a minimal number of employees compared to a non-tech startup. This also means that most of these startups operate on a tight budget and cannot afford to have more employees, especially full-time ones.

 

To have an in-house employee means they need to follow a lot of government rules and regulations like minimum basic pay, providing PF funds, insurance, and paid vacations. This means a lot of resources should be allocated to this ‘extra’ spending. This is not viable for a new startup that is still in its infant stages. Hence they prefer to have very few in-house employees who form the core team. 

 

But the advancement in technology forces almost every company to have an online presence. Today every company needs a website to explain them and maintain credibility. They also need active blog sites to educate and create awareness among their audience and social media handles to build a credible customer base and market their products/services.

 

This means that all the startups, whether tech-based or non-tech-based, require web designers, content writers, social media marketers, video editors, and graphic designers to actively maintain their online presence.

 

 In India, the startup scene is highly competitive. The companies are forced to cut down costs to operate profitably. Most startups can’t afford to have full-time in-house employees for these roles; hence they prefer to have freelancers for a lot of work.

 

 Having an in-house employee means they need to spend on extras like minimum basic pay, insurance, PF funds, etc. So hiring a freelancer means they can pay them based on their period of work and contribution alone.

 

Apart from employing editors, designers, and content writers, many companies are also employing programmers and developers on a freelance basis. For example, a web development team needs to have a minimum of 7 different people doing different roles. Sometimes the startups will only have two or three people doing the core management roles. For the rest of the roles, they employ highly skilled freelancers on a project basis. This reduces the burden of paying someone every month even when their major contributions are over. 

 

 There is a general notion that like will be paid less, and an in-house employee will be paid more, but an in-house employee will be more, but in reality, it’s quite the opposite. Because of these extra funds a company needs to spend on an in-house employee, they will be purposefully paid less in these startups to maintain the sustainability of the company. For a freelancer, these companies will pay on par with industry standards because they don’t have the burden of keeping them on their payroll for a longer period. 

 

To summarize, there are dozens of startups coming into the scene in India every day. Every single one of them needs real contributors, not just average workers. So rather than getting stuck with a medium or large-size company as an average worker, it is better to develop mastery in one or more skillsets and become a freelancer and use the market demand to your advantage. This is the best possible way to make more money than your peers in today’s world.

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Riha John Doe
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