Small business owners often use independent contractors to get jobs done. However, as more people choose to work for themselves, big businesses may need to join the trend in order to get access to the talent they need to get work done.
Advantages of Using Independent Contractors
You Can Save Money
You are exempt from paying federal and state payroll taxes, healthcare benefits, workers’ compensation, unemployment insurance, etc. if you use independent contractors. Additionally, you are relieved of the responsibility of providing office space, paying for travel, and other administrative obligations.
Fewer Chances of Workplace Lawsuits
Some of the most frequently arising labour cases, such as wrongful termination and workplace injury, cannot be brought against you if you use independent contractors. Rarely, you might be hit with a discrimination lawsuit. Although Title VII, the most well-known employment discrimination legislation, makes this extremely improbable, independent contractors (IC) could still use other laws as a strategy. So, be aware of that risk.
You can screen potential employees
Independent contractors are an excellent way to vet potential candidates if you want to make a full-time hire next quarter but are unable to make the switch at this time. If you find a contractor you like who you can see yourself recruiting, you essentially avoid the costs of finding, hiring, and interviewing candidates. Furthermore, the contractor will already be aware of your company and has earned your trust.
Productivity is increased through flexibility
Every year, more people leave the traditional labour market as a result of flexible employment arrangements. In contrast to full-time employees, independent contractors can choose their own work and can reject tedious projects. They are independent. Both full-time employees and contract workers are, therefore, more likely to be productive when they do accept roles.
You can use the services of workers on a temporary or as-needed basis
A few months into the employment, you shouldn’t hire someone and then scramble to find work for them. There must be a need for it. Independent contractors can take the helm if you have a one-time project (such as creating a new product), a continuing one (such as IT, writing, social media management, etc.), or you require personnel on an as-needed basis.
You can outsource the task to temp or recruitment services
When finding contractors, you have two options: either an agency or take the initiative and find, interview, and hire a contractor on your own. When you use an agency,the contractors are hired on your behalf by a reputable temp or recruitment agency. They offer compensation, 401K, PTO, and all the other benefits and expenses. They also screen the contractors and ensure they have the right level of contractor work insurance in place, reducing your risk.
You have access to a broader array of talents
Finding that one person with a long list of unrelated skills doesn’t have to take forever. Additionally, you are not required to offer full-time employment for every necessary talent on your team. You can hire more specialized team members if you only need one or two people with a wide range of talents.
The Disadvantages of Using Independent Contractors
You can not be assured of their availability
Let’s say it takes months to find an IC you can rely on to deliver excellent work. Project completion. She is no longer available when another job with a short turnaround time arises a few months later. If you work with a temporary staffing company, they might send someone else. The quality of the job and the final product may be variable and unpredictable in either of these situations.
No motivation to go above and beyond
Employees receive commission, incentives, paid time off, and healthcare benefits. On the other side, independent contractors frequently pay for benefits out of pocket, manage their own 401(k), and forgo a payment if they need time off. What motivates you to complete the task, then? A salary, I assume? If the goal is to receive payment once the project or several project-related components are finished, the quality of the job might not be the top priority.
Full-time workers might sense a threat
While hiring a contractor might be simpler for the company, W2 employees might worry that their jobs are in jeopardy. This might have a detrimental effect on staff morale and the calibre of their job and even lead to higher turnover.
They might work for one of your rivals
Employers can include a non-compete clause in a contract, but doing so might discourage a contractor from working with you at all.
You do not have the ability to fully supervise contractors
Independent business partners are autonomous. Nowadays, especially in creative jobs, many contractors work remotely. To ensure you and your new employee are on the same page, it is advisable to establish a communication schedule and frequency before you hire. However, if you need a contractor to work there, you can include them in meetings and check-ins just like you would your full-time staff.