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

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