hiring a start-up finance team
How do you best scale your finance team?
To scale a business, you need more than a good idea; you need people to bring your vision to life and get it to the market. As your business grows, you need people to look after the ‘corporate’ aspect, including a finance function. (You also need an HR function to look after your people.)
Startups often find hiring a challenge, as it’s hard to identify the kind of person with the skills you need, who fits into your company culture at a price that makes sense. You also need to decide the employment status of the people you bring in, making sure it’s appropriate for the tasks you need to be completed and your business's growth stage.
In the UK, most workers fall under the terms employee or self-employed contractor. There are advantages and disadvantages to hiring people on both of these statuses. However, that’s not all. There is a new employment status that we are pioneering here at Quantico, which we believe gives startups the best of both worlds. We call it ‘inhouse’.
In this article, we’ll look in-depth at these three employment statuses and their pros and cons across four critical areas. When you’re looking to hire Finance Operations experts to make a difference in your startup, which employment status will provide the most value for you?
Before we begin our employee vs contractor vs Inhouse 2021 comparison – let’s clarify what we mean by all these terms.
Hiring an employee on a full-time contract means you pay them a salary (equal or above the national minimum wage) and must keep to regulations such as keeping to an agreed number of hours and a place to work. You must also pay National Insurance Contributions for your employee. As a result, hiring full-time employees is generally the most expensive way to bring people into your business.
On the other hand, you have complete control over your employee’s work and how they do it. You control the processes and set the standards. In most cases, your employee will only work for you.
You can hire a contractor to work for your company, but they are not an employee. Instead of a full-time contract, you will pay them by the hour or day. This is a flexible and economical way to hire as you only pay for the tasks your contractor completes. You don’t have to worry about notice periods if you don’t want to work with them anymore – and there is no National Insurance, sick pay or holiday pay. It’s much easier to process.
However, contractors will work for other companies, not just you, so they may not always be available when you need them. You do not have as much control over how and when they complete their tasks.
Inhouse gives you the advantages of both employees and contractors, without the downsides.
At Quantico, we provide inhouse financial teams to fast-growing businesses. Our experts will be part of your company, sitting in your office (if you wish) they can immerse themselves in how you work, as well as be there for you and your leadership team.
But, you don’t have to worry about employee taxation, admin or upskilling. We'll do all that for you.
It is vital to get your first hires right. You don’t want to hire people who don’t have the right skills. Nor do you want to pay over the odds for a hire at such a critical stage of your business.
Further down the line, the people who work in your business must have the right status. For example, hiring contractors to save money, but using them in the same way as employees, can put you on the wrong side of IR35 regulations.
See how employees, contractors and inhouse teams fare against the four key criteria you need to consider when scaling out your team:
A strong culture is essential in a scaling business; it’s what keeps you going through the tough times and keeps you moving in the right direction.
You need to hire the right skills in your business if you are going to scale. As your business grows, the levels of skills you need will evolve.
As a startup, when every pound is precious, your hires need to make financial sense.
Administration is generally something you want to avoid as a startup, as it takes time away from the work that actually grows your business.
With the traffic light system, we’ve provided an overview of how each individual fares in each of the four critical areas.
Now let’s delve into the details.
It’s clear that the inhouse status combines what’s excellent about employees and contractors and gives them to you in one easy package.
At Quantico, we’re a team of FinOps experts. That’s Finance Operations – where finance, operations and technology meet. We provide inhouse finance teams to fast-growing businesses just like yours, giving you the systems you need to scale, without the admin and hassle.
If going inhouse sounds like the way forward for your business, get in touch.