The world of business is constantly changing and responding to the market. In a country where about 16 million workers identify as self-employed, utilizing and taking advantage of this growing employment sector can make a difference.
This is why hiring independent contractors can be a dramatic way to shake up the flow of work within your company. Doing so can save money, streamline work, and provide other benefits.
However, it isn’t for every company.
Let’s look at the pros and cons of hiring independent contractors so you can decide if doing so is for you.
Pros of Hiring Independent Contractors
One of the biggest benefits of hiring independent contractors over hiring full-time workers comes from the cost. Hiring independent contractors rather than maintaining employees can end up costing about 30% less.
However, the other benefits can be just as significant. The fact that independent contractors don’t count as employees separates your business from legal protections granted to employees.
In addition, it prevents you from having to manage a staff of workers.
Independent contractors may also offer additional flexibility. These workers can be chosen from a field of professionals to perform a specific job. Then, when that job is complete, they no longer work for you.
This can be helpful if your business goes through a cycle of busy and less busy periods. You can hire independent contractors when you’re swamped but don’t need to keep paying workers when you’re in an off-season.
Cons of Hiring Independent Contractors
Many of the disadvantages to hiring independent contractors come from the level of control an employer has over them. Full-time employees are, usually, with a business for the long haul.
They’re able to grow and change with the company, refining their skills to address the exact problems faced by the business. Independent contractors don’t have this advantage. This can create friction if their way of doing things doesn’t align well with a business.
Some employers may also find their contract with an independent contractor restricting. If the type of work you need changes, an employee will change easier than a contractor will.
Other problems may come from the variability within the world of independent contracting. Depending on your line of work, you may have trouble finding an independent contractor specializing in your field. Plus, the quality of work may vary from contractor to contractor.
What to Remember When Hiring Independent Contractors
Ultimately, the choice between these 2 comes down to the type of work required. If your business can’t afford to manage and maintain a staff of employees, you may want to look into hiring freelancers or independent contractors.
However, if you do hire independent contractors, it’s important to keep a few things in mind. Since they aren’t employees, you’ll have less control over how they work. Putting too many restrictions can actually lead to legal troubles.
In addition, you’ll probably need to file tax paperwork for each contractor. If you pay over $600 per year to a contractor, you need to provide a Form 1099. You can read more here about why this is important and what happens if you forget.
Choose Between Independent Contractor vs Employees
There are plenty of benefits to hiring independent contractors. However, you want to make sure that these benefits align with the type of work your business requires. Doing so can save you time and money while increasing your business’s efficiency.
If you want to learn more about managing your business, check out our other articles.