Staff costs during a recession
21st January 2009
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During a time of recession, one of the primary worries for small businesses is staff costs. If you take on permanent staff, you will have the (possible) problems of short-timing or making people redundant - which can be very costly.

Permanent staff also have the associated costs of Income Tax and National Insurance, not to mention the paperwork that goes with it.

Of course, you may have already had to make redundancies and are now left short handed. What to do?

Self employed staff are one answer .. self employed people pay their own tax and national insurance, so you don't have the extra overheads associated with employing people. You don't have to pay their holidays or sick pay. And they will usually only be paid for the hours which they actually work.

They are usually flexible about working hours - if you only want them for 3 hrs a week, then that's what they'll do.

This is a great solution for the small independent business. You can confidently take on someone who is experienced - and who's running their own business and can sympathise with your situation - and if it doesn't work out, there are no lengthy termination procedures, and no hard feelings.

In my business I bill my clients monthly by invoice. Payment is by cheque or bank transfer on invoice, and I only bill for the hours worked. Transportation costs are mine, I can claim these myself against tax (or at least, my accountant can do it for me). The fact that I don't get paid when I'm ill means that I tend to take less time off than those who are 'permanently' employed!

Working together, we can get through this recession!

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