“Should I hire independent contractors?”
It’s a hand-wringer for many business managers. It might come up as your business experiences a sudden surge, or when the chance to bid on a huge contract presents itself.
The independent workforce now makes up over 40% of US workers, so there may be no better time to tap into that resource. But is it right for you?
While we can’t answer that question outright, we can give you the tools to understand why hiring independent contractors could be a real benefit to your company.
Give yourself flexibility
Everybody wants to be able to do everything in today’s commercial marketplace.
Partly that’s because we all want to be ready to respond to the latest changes in our industry. That could be anything from developing technology to a social media trend.
Hiring independent contractors is a great way to add that flexibility to your organization. With traditional employees, your ability to capitalize on situations is limited by the skill set of your employees and the long lead-times involved in the hiring process.
You could hire new employees, sure, but then who’s to say their skills will remain relevant to you over time?
Independent contractors are also great for managing changing business needs. You can bring on a retinue of contractors to cope with high volumes of work or a particular project without needing to find a niche for them when the work reduces back to normal levels or the project comes to an end.
Save on expenses
It’s no secret that regular employees come with a lot of requirements and expenses employers must meet or incur.
Among the considerations for a company hiring employees are:
- Providing space for employees to work. This will include health & safety considerations as well as comfort.
- HR support to deal with parental needs, ambitious or underperforming employees, requirements to show continued professional development, and other personal and interpersonal issues such as stress and disputes.
- Benefits such as health insurance, pension etc.
- Continued payment for employees outside of a usual working pattern, such as long-term sickness and parental needs.
- Compensation in the event of accident or injury
- Meeting travel and training expenses
All of these add up to a lot of expense for an employer. And that’s fine if you’re investing in your company’s future and trying to build a skilled in-house team.
But you don’t always need that. By hiring independent contractors, you can bypass a lot of these expenses while still completing work.
Independent contractors may have a higher payment per hour, but when you factor in the extra investment of time and money into regular employees, the savings soon become obvious.
You can hire independent contractors fully-trained without any of the other financial obligations to your company except their salary.
Protect your company
As we’ve covered, regular employees can need a lot of maintenance to keep them happy. What happens when the employer/employee relationship breaks down?
Lawsuits can be devastating for a company. By hiring independent contractors, you can insulate yourself from this risk.
Contractors aren’t your direct employees, so you don’t have the same legal responsibilities for them as you would a regular employee.
Here’s a selection of rights held by regular employees that you won’t have to worry about when hiring independent contractors:
- Right to form a union
- Right to sick or parental leave
- Protection from employment discrimination (except racial discrimination)
- Right to minimum wage and increased overtime payment
So hiring independent contractors can ensure your core business doesn’t become eclipsed by legal issues and expensive payouts in the event of a dispute.
Anything that allows you to focus on what you do well gives you an advantage over competitors distracted by other issues.
There are some legalities you’ll need to keep in mind. Your written contract will need to be smart to set the terms of employment. You’ll also need to consider things like the question of what happens to intellectual property created by independent contractors.
Recruitment can be a hellish process for all involved.
Timescales are long. Even after posting a job ad, you’ll often have set a closing deadline and be unable to advance before then. Following which you need to go through the lengthy and time-consuming process of interviewing candidates.
It can often take a least a month before the candidate is able to come and work for you.
And this all supposes you’ve found the right candidate and that the hiring won’t turn out to be a mistake. It’s also pretty common for new employees to change their minds and jump ship within weeks.
In some cases, you can go through all this for just a single employee.
By contrast, hiring independent contractors lets you get boots on the ground quickly. You can mass-hire, skip interviews (even if you conduct a less intensive skills check), and deploy within weeks rather than months.
Being able to deploy workers so quickly could be the difference between winning or losing a contract, or delivering a project to budget.
It can also allow you to manage harmful backlogs.
Expand your scope by hiring independent contractors
Depending on the nature of your industry, you may find that hiring more employees isn’t the best way to scale up your business. The extra overheads of regular employees may keep your company at a certain size.
Hiring independent contractors can be an effective way to break through that ceiling. You can effectively inflate the size of your workforce and the size of your company.
Knowing you can bring in independent contractors to cover more ambitious work gives you a realistic way to beat your competitors without taking dangerous risks.
Independent contractors may help you punch above your weight in your chosen industry. You may even find they help you snowball to the point where you can afford to invest in more regular employees.
So next time you see an uptick in your work or need to meet the requirements of a project, consider hiring independent contractors and feel the benefits.