How does the cost of an in-house FTE compare with hiring independent contractors?

10 Ways to Improve Your Winery’s Marketing

Hey, lucky you! You’re the winemaker and owner of a small, (dare we say, “Artisanal”?) winery! And guess what? You’re also the marketing department (hooray!). And while this might sound, to many outsiders, that you’re living the life, we know that there are just some mornings when you do not want to climb up onto that tractor.

During those busy months in the winery and vineyard — you know the months I’m talking about; January through November — marketing naturally takes a back seat, but at the same time, you know that marketing is what makes the money keep flowing in.

Here are 10 things you can do right now to make your marketing better and also easier for you. But notice that I didn’t say “10 Simple things …” ? Some of them are simple, while some take a little effort, but all of them will improve things for you year after year.

  1. Create an entirely separate email account that is just for your winery

    When a prospective customer emails you, they are thinking of you. The longer the delay between sending you an email and receiving a response, the less warmly that response will be received. To speed up your response time with potential buyers, create an email account that you only make available to your customers – meaning, don’t use it to enter all those exciting Free Cruise Giveaways, or to subscribe to random newsletters for taco recipes — THIS IS JUST CUSTOMERS.

  2. Create an alert on your email account so you are notified when an email comes in related to business

    Related to #1, create an alert on your phone that tells you when you receive an email in your winery mailbox so you can get back to them right away. If this doesn’t seem practical, then set up an auto responder that automatically replies with a message telling the sender that you’ll respond at the end of the day, and “in the meantime, why don’t you go and pick up some wild Alaskan salmon to grill – it goes just perfectly with the Pet Nat Rosé of Pinot that you’ll find on our website.”

Comparing the Costs of a Full-Time Employee
with those of hiring Specialized Contractors

Full-Time Employee
Maintaining an in-house FTE costs significantly more than the base salary.
Hiring Specialized Contractors
Hiring Specialized Contractors means getting the right skills for each project

While independent contractors come at a higher hourly rate, the advantages they can provide in filling in the gaps in capabilities in your existing marketing team, while also letting you avoid paying the additional load of paying employment taxes and employee benefits, can be very significant.

* “Employment Taxes” includes: Social Security Tax, 6.2%1, Medicare Tax,1.45%1, FUTA (Federal Unemployment Tax Act), 0.6%2, SUI (State Unemployment Insurance), 3.4%3, SDI (State Disability Insurance), 1.0%3, ETT (Employee Training Tax), 0.1%, and Workers’ Compensation Insurance, 3.0%

Source:

1 Social Security Fact Sheet. https://www.ssa.gov/news/press/factsheets/colafacts2020.pdf

2  Employment Taxes. https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes

3  California 2020 unemployment, disability and employment training tax rates and limits. https://taxnews.ey.com/news/2019-2001-california-2020-unemployment-disability-and-employment-training-tax-rates-and-limits

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How does the cost of an in-house FTE compare with hiring independent contractors?

In-House vs. Outsource: Comparing Costs

The current crisis of COVID-19 has caused us all to examine how we conduct business. With restrictions requiring wineries to temporarily close their doors to the public, leading to workers being laid off or furloughed, wineries are considering other ways to get the work done.

For marketing roles, this has come down to two options: 1.) allowing your full-time employees to work from home or 2.) using independent contractors — and there are benefits to each option.

For starters, your in-house marketing folks are already familiar with the lay of the land; they understand the brand, and they know what their stakeholders like. On the other hand, your in-house creatives often have a very limited skill set, and they work in a protected environment somewhat isolated from industry trends and innovations. Independent contractors often have a deeper skill set  (and different contractors can be hired for different skill sets) while being immersed in the industry with exposure to several brands, but they come at a higher hourly rate.

Additionally, with a full-time employee, the winery must pay Social Security and MediCare Tax, Workers’ Compensation Insurance, vacation pay, medical, dental, and retirement contributions, as well as covering the cost of a work station, computer, and software — where on the contractor side, all these expenses are covered by the contractors themselves.

What is the true cost of a full-time employee? And how does it compare with utilizing a contractor for the same work? Here’s a quick rundown:

Comparing the Costs of a Full-Time Employee
with those of hiring Specialized Contractors

Full-Time Employee
Maintaining an in-house FTE costs significantly more than the base salary.
Hiring Specialized Contractors
Hiring Specialized Contractors means getting the right skills for each project

While independent contractors come at a higher hourly rate, the advantages they can provide in filling in the gaps in capabilities in your existing marketing team, while also letting you avoid paying the additional load of paying employment taxes and employee benefits, can be very significant.

* “Employment Taxes” includes: Social Security Tax, 6.2%1, Medicare Tax,1.45%1, FUTA (Federal Unemployment Tax Act), 0.6%2, SUI (State Unemployment Insurance), 3.4%3, SDI (State Disability Insurance), 1.0%3, ETT (Employee Training Tax), 0.1%, and Workers’ Compensation Insurance, 3.0%

Source:

1 Social Security Fact Sheet. https://www.ssa.gov/news/press/factsheets/colafacts2020.pdf

2  Employment Taxes. https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes

3  California 2020 unemployment, disability and employment training tax rates and limits. https://taxnews.ey.com/news/2019-2001-california-2020-unemployment-disability-and-employment-training-tax-rates-and-limits

Go to article to read comments