Deciding Between Employees Or Contractors
Business owners have a lot on their plates. There is managing your schedule to be able to help as many people as you can throughout the week. There are financial obligations and considerations that you have to make. To not only ensure you are providing affordable services to clients but to make sure you are being paid enough for your work. You have to make a livable wage, after all.
As a private practice coach for therapists as well as a business owner myself, I know how challenging finding answers to everything feels.
It's hard not to second-guess yourself and the decisions that you make. You know it can affect not only your clients but your own life as well.
One of the biggest questions that inevitably comes up is deciding whether you should have employees or contractors. In a recent post, I talked about the difference between contractors and employees, and why Ohio LPCs should be brought on as W2 employees and not as independent contractors. Quite simply, the Ohio LPC is a dependent license and these folks are not able to practice independently (yet!).
Here are some tips to help you decide what is best for your private practice.
Tips for deciding between w2 employees or 1099 independent contractors
How much control do you want?
The biggest decision-making factor between employees and contractor boils down to control. “Control” tends to be a dirty word in the therapy world - we often associate it with unhealthy relationships, manipulative behaviors, or unhelpful strategies to reduce anxiety. Take off your therapist hat and put on your business owner hat. In the business world, “control” has a totally different meaning. How much say do you want in what goes on in your practice?
Independent contractors have total control over how they conduct themselves, even while working in your practice. They are their own business.
If you are completely fine with a therapist being able to fully set their own schedule, determine their own rates, their own hours, own policies, and where they work (from home or in the office) then a 1099 contract position may be the right choice for you. You cannot require contractors to attend staff meetings, take specific trainings, provide specific services, etc. They get to decide it all. Which is great!
However, if you don't care for the idea of someone having the most amount of free reign possible, you are going to be better off hiring W2 workers instead. With employees, you can require staff meetings, trainings, days and times worked, impose limits on the number of sessions they need to provide, require adherence to policies and procedures, provide supervision and other professional development, etc.
Are you fine with a higher turnover rate?
I'm not saying that it sure happens all the time with 1099 contractors, but this is a risk that you take when choosing to have 1099s.
Granted, a W2 employee can still leave when they want to. However, most often, this is done with at least a month or longer of a courtesy notice. With contracted therapists, there are no legal requirements or obligations for them to provide any type of courtesy notice. After all, they are just providing their services to you, and you may be one of many other companies they do business with.
This amount of flexibility can sometimes cause a higher turnover rate to occur at private practices.
What do you want your investment to be in them?
Another factor to consider is how much of an investment you see in the people who work for you - both financially and time-wise. Keep in mind that with contractors, you cannot require much of them. If you’re looking to create a company culture and want to invest in your workers with things like bonuses, benefits, health insurance, supervision, professional development, trainings, etc - you will want to hire employees.
When you invest and see therapists as traditional employees you have a unique interest in the amount of success and growth that they have. This can be important for the therapist you are bringing on as well.
What is your income like?
Quite frankly, employees cost more. Growing your practice is an area where you have to spend money in order to make more. On a small business, this can be a hardship. And it’s important to note that whether you have employees or contractors, your income as the business owner/therapist (not your other therapists’) will be the largest contributor to your business’s overall income.
If you are looking to hire employees, you’ll want to save up a healthy reserve to have costs associated with hiring. You’ll want a reserve because even if your income revenue slows down, you are still responsible for paying a portion of their taxes and any benefits you offer, and paying for any of their time worked (not just clinical hours!).
If you contracting therapists, you'll feel a little more at ease knowing they have other opportunities for work and you have significantly less obligation to provide for them and prepare for them to be at your practice.
If you are feeling stressed about everything that needs to be taken care of as a business owner and overwhelmed with the tasks required to grow your practice, I completely understand. Let's connect soon so I can help you with private practice coaching so you can feel confident in the decisions you make.
Sea Glass Counseling and Consultation is an EMDR therapy practice in Dublin, Ohio. Our compassionate, skilled therapists use evidence-based techniques grounded in the neurobiology of stress, trauma, and relationships to make sure your treatment is personalized and effective. Sea Glass therapists provide telehealth counseling in Ohio for individuals and couples. We’re best known for providing Intensive EMDR therapy, anxiety treatment, and sex therapy for Christians. Interested in working together? Contact us today to get started with a Certified EMDR therapist in Ohio.