Worker Bees, also known as employees, contractors or, in some cases, minions, are second only to clients in the importance to a good business.
The first thing to remember is, you are a Worker Bee! There should never be a task in your business that you have not done, either completely or by helping someone more knowledgeable perform the task. I absolutely hate building web sites, and there are several people here who actually love it. I consider them sick individuals who need counseling, and I try to not be around when that kind of work is being done. But, I occasionally overcome that loathing and help, even if it is just putting text into an existing page.
Never refuse to do a task because it is “beneath you.” If there is work that is beneath you, your business should not offer it.
The best thing a supervisor can do is perform the grunge tasks no one else wants to do, freeing up others to do the work they excel in. Or, being an assistant to some knowledgeable contractor while they perform work outside your capabilities. I remember a few times when we had a very good network engineer doing some weird stuff to network switches, and I was his records keeper; pencil, paper, writing notes as he told me what he was doing.
That being said, Worker Bees come in several varieties. The most common is the employee, then internal contractors, then outside contractors. Each have their own set of problems and benefits.
Employees
Obviously, this is someone who works directly for the company. We have a few employees, one (me) on salary, and a varying (small) number of part time hourly people.
One of my big mistakes when we first started Daily Data was to feel everyone needed to be an employee, and whenever we had too much work for our staff, we had to hire someone new. Good employees are loyal to the company, and deserve that loyalty returned. Also, as an employee, they represent the business to the outside world in a way no contractor can.
We were growing rapidly, and adding employees regularly. It looked like there was no end to how big Daily Data could become. Then, the bottom fell out of the business, and we had five employees where we actually needed one or two for the amount of work we had.
As an employer, you owe it to your employees to provide them with a steady, secure source of income, reasonable working conditions, and a sense of self worth. When things go bad with the business, as they will at times, you are required by the loyalty they have given you to ensure they are hurt last, and least, by the problems.
In the recession following 9/11, Daily Data effectively went out of business. We lost revenue at an astounding pace as clients chose to not have work done at that time, yet our expenses remained high for a long time. At that time, we had three excellent employee’s who had put their heart and soul into the company, yet there simply was not enough work to keep even myself occupied and paying bills.
However, we owed these excellent employees as much time as possible to find new income in a labor market that was extremely tight. All in all, it took three months before the last one found another job.
Because of this, I’ve learned that employee is a status that needs to be offered with care. While employees receive lower pay than contractors, the additional expenses of having an employee and the decreased flexibility when when a down cycle hits mean you need to be very sure of the person and the company needs before deciding to add a new employee to the business.
Employee’s tend to get paid a much lower hourly rate than contractors, even when the additional taxes paid by the company are taken into account. However, the cost of employees is much higher than contractors if you treat them as they deserve to be treated.
One thing I reserve for employees only are some of the benefits we use to offset the lower pay. Employees have first choice of used equipment, they can host their own web sites at no cost, and have stock options not available to anyone else.
Salaried employees need to be very limited. Daily Data currently only has stock holders who have worked as salaried employees.
Internal Contractors
“Hiring” someone as a contractor is much more flexible than hiring as an employee since this is generally done for a specific duration; for a few months or the life time of a specific project. There is no assumption of continuation after the specified time, so if a contractor doesn’t perform as needed, or if a downturn in business occurs, it is simply a matter of not starting a new project.
The cost of the flexibility is a higher hourly pay rate, especially important since the contractor must also pay all of the “hidden” taxes normally paid by an employer. In Texas, this includes employer contribution to Social Security and Medicare, State and Federal unemployment taxes, and some other things I don’t remember right off. A good rule of thumb is that an internal contractor will make up to twice the hourly rate of an employee.
Even with the additional cost, however, hiring staff initially as contractors have benefits that greatly outweigh the short term cost. They can be used to fill a temporary increase in business, and during that time you can watch how they integrate with your customers and employees. If they fit well, and the business increase looks permanent, you can then consider offering them a change to employee status. By like token, you can easily let them go if your needs change or they turn out to not be a good fit.
External Contractors
These are the reason you can offer much more than the services your company can actually provide. They are generally people who have one or more skill sets not found in your set of employees and internal contractors, but skill sets which are not needed very often also. In the case of Daily Data, we use several external contractors to offer services we really can not perform, like Windows Server specialized setups, or highly specialized and technical network work.
External contractors really are not profit centers for us since we quite often pay the contractor almost what we bill the client. In many cases, the external contractor bills the client directly, and Daily Data does not see any income from the work.
Why use them, then? Reputation. When a client asks for something we can not provide, if we know some one who can do the work, and we trust to do the work well, we will use the external contractor for that. There are few things better than telling a client “well, that is something we normally don’t do, but we have an associate that is excellent at it.”
External contractors allow us to handle our clients needs far in excess of our actual abilities, so we get a reputation as the company that can accomplish a lot.