The Hiring Decision: Employee vs. Contractor vs. Part-Time
Before posting a job, the most important hiring decision is the employment structure. Full-time employees provide consistency and control but carry significant overhead: payroll taxes, benefits, workers’ comp, unemployment insurance. Contractors offer flexibility and lower upfront cost but come with IRS classification rules, higher hourly rates, and limited control over how work is done. Part-time employees split the difference: flexibility with employment protections but fewer benefits obligations depending on hours.
| Structure | Employer tax burden | Benefits required | Best for | Key risk |
|---|---|---|---|---|
| Full-time employee | ~7.65% FICA + FUTA | ACA if 50+ employees | Core roles, ongoing work | Fixed overhead during slow periods |
| Part-time employee | ~7.65% FICA + FUTA | Limited at under 30 hrs/wk | Variable workload, admin roles | Availability and retention |
| 1099 contractor | None | None | Project work, specialized skills | IRS misclassification penalty |
| PEO / leased employee | Via PEO (fee-based) | PEO handles | Businesses needing HR infrastructure | PEO contract lock-in |
Writing a Job Description That Attracts the Right Applicants
Most small business job descriptions describe a role as a list of tasks. The best job descriptions describe a role as a set of outcomes: what success looks like at 90 days, 6 months, and one year. “Manages social media accounts” attracts anyone with a Facebook account. “Grows our engaged Instagram following from 2,000 to 8,000 in 12 months by posting 5x per week and responding to all comments within 2 hours” attracts someone who knows what that requires.
Salary transparency increases application quality and reduces wasted screening time. In markets or states where pay transparency is required by law, non-disclosure is a legal risk. Post the range. Candidates who cannot be retained at your budget will self-select out, and those who apply will be pre-aligned on compensation expectations.
Interviewing for Small Business: What Actually Predicts Performance
For small businesses, the most predictive interview approach combines behavioral questions (“Tell me about a time when…”) with a short work sample. A one-hour paid work sample test, write a sample email, build a simple spreadsheet, draft a short proposal, eliminates 80% of candidate uncertainty that behavioral interviews alone leave unresolved. Most candidates who perform poorly on work samples would have passed a standard interview.
The reference check is not optional for small businesses. Large companies have HR departments, severance structures, and legal teams to manage bad hires. A five-person business where one person represents 20% of the team cannot absorb a bad outcome the same way. Call two references per finalist. Ask specifically: “Would you hire this person again, and why?” The hesitation before the answer is often more informative than the answer itself.
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