Entrepreneurial Small Business 4th Edition by Jerome Katz ,Richard Green

Exercise 29

Focus on Small Business: Chris Perkett and PerkettPR, Inc.
As a former consultant herself, Chris Perkett had a fairly easy time deciding whether to hire independent contractors when she started her Marshfield, Massachusetts, virtual public relations agency, PerkettPR, Inc. in 1998. Because hiring employees involved so much hassle and paperwork, and would require ongoing salaries, she opted instead for independent contractors for her new firm.
Perkett admits she initially appreciated the temporal nature as well as the flexibility of having independent contractors, but as she began to increase her client base, those very aspects began to concern her. On one hand, the contractors' relationships with the clients were becoming important to the company, so losing a contractor could hurt the business. And she increasingly wanted to show a commitment to the customers and to the contractors.
So at the end of that year, Perkett decided to switch to an employee-based staff, hiring many of her former consultants as full-time employees. Since then, Perkett says there's been an increase in the level of excitement in the company's projects, and her clients now feel the company is growing and stabilizing, two things that weren't happening with the contractors.
Still, employees aren't necessarily the only way to achieve a common vision and commitment for a business, according to Jennifer Johnson, principal of Johnson Co., The Virtual Agency. With 15 contractors and only 2 employees on board, Johnson encourages dedication to her Salt Lake City public relations firm by requiring all contractors to attend regular business meetings and retreats and to meet with a senior consultant mentor. "I think it's a myth to believe that because someone is an employee, it means they're more dependable," says Johnson. Contractors, consultants, and employees all have to show customers a passion for the business.
According to Johnson, the ever-changing nature of today's business world has left traditional job descriptions by the wayside and forced companies to have a more flexible structure. In that structure, consultants can be seen as having an advantage because they are used to each job being different and always having to prove they are delivering results, not merely putting in their time.
As for Perkett, although she's had to adjust to the variety of personalities that now exist in the core of her company, she's confident that hiring employees was the right choice for her growing business. It was a bit scary at first, having the added monthly salary costs, but it led to growth of the business and the employees' commitment to it.
How does Chris Perkett's hiring and retaining employees perspective compare or differ from Jennifer Johnson's perspective