I work as a contractor and am managing a small team. I easily do the work at least two people in my team, in addition to managing ("babysitting") the team. While my pay is not 5 times their pay, it is most certainly higher than theirs.

But my most attractive trait is not that I work harder, it is that they can fire me at any point, without giving any reason or any notice. On top of it, they don't have to deal with any personnel issues - if I misbehave, they'd just fire me on the spot or complain to the agency and let me be their problem. No matter how hard I work, I rarely get a word of appreciation. They also don't have to do performance reviews, "rankings", pay discussions etc. Yes, it all comes at a higher cost, but it also removes all the pesky things that nobody wants to deal with.

Think of it like hiring a plumber even though the plumbing issue is small enough for you to fix yourself. You just don't want to do it

> it is that they can fire me at any point, without giving any reason or any notice.

Isn't this true for an US non-union employee?

If they live in an at-will employment state, yes.

Who's talking about USA?

When times get tough they shouldnt hire freelancers in the first place... If they have ongoing hires they pay 3 times as much on a freelancer as they do on an employee... this logic doesn't check out at all

No, the logic is right.

If you have full-time employees you have to fire them when times get tough. In some countries it’s very hard to fire people and it requires months of notice. These laws encourage companies to choose contractors so they don’t get stuck with employees they can’t fire during tough times.

If you have freelancers you can more flexibly pause, delay, or reduce hours and then resume them again when you need them.

You can also scale freelancers to your workload or ability. With each FTE you’re committing to an extra 40 hours of pay every single week, no exceptions. With a freelancer you could have them do 5 hours one week, 0 hours the next, 40 hours after that. Even at 3-5X the rate it could come out to be less costly if the workload is intermittent.

> In some countries it’s very hard to fire people and it requires months of notice

This is, of course, true. I want to add that a company in Europe can still tell you not to come back tomorrow. They would just have to pay for those months of notice as if you were employed. In other words, it is expensive, but it is only a money issue.

> In other words, it is expensive, but it is only a money issue.

Bingo. That's all that matters.

Where's the difference in employing a freelancer for 1 month for 20k vs paying an employee for 3 months for less?

It doesn't make any sense.

In some EU countries like Portugal you are also required to pay quite handsome severance based on years worked. Between 15 and 45 days of base salary for each year of service, with a minimum of three months’ salary.

You don't hire the freelancers _when_ the time gets tough, you hire them when you're fine. But _if_ you need to downsize, you can cut them easily.

In a country with strong labor laws, you can't do that with FTEs, you're stuck with them unless they make major missteps.

In some cases you can do layoffs, but that is larger process that takes time. And there are some regulations that mean you must try to find other work inside company for them or offer them job if such comes available. Ofc, you can pay them off if they agree to.