Things To Consider When Hiring Independent Contractors For Your Workforce Needs

by Josh Biggs in Business on 18th February 2021

It’s expensive to keep hiring and firing employees. After all, every time you fire an employee you need to ensure you’re following the right legal process and doing it for the right reasons. You then have the cost of advertising, interviewing, and training new employees. Of course, the new employee can’t be doing the same job as the old employee. 

It’s why so many companies have legal advisors onboard. It can be particularly challenging if you’re in an industry with seasonal demand, you need to change the size of the workforce regularly.

The answer is to use labor hire. That’s independent contractors that can be started and stopped when needed without all the penalties associated with permanent employees.

Understanding The Independent Contractor

An independent contractor works for themselves or for an agency. You’re not taking them on as an employee. Instead, your contract is with another company, either the contractor or the labor agency.

The contract will specify the role of the contract and the duration. In many cases, especially with agencies, this is open-ended and the contract can be terminated at any time.

The independent contractor is responsible for their own pay, benefits, and insurance. All you are doing is hiring their service. That makes it much easier for you to get extra help when you need it and to budget your costs.  In short, you can have extra staff when you need them without the hassle.

Considerations When Hiring Independent Contractors

When you’re choosing an independent contractor you’re going to need to go through the same interview procedure as you would with an employee. Although they are independent, they will still be functioning as an employee, that means you need to be comfortable talking to them and be assured that they are competent.

In order to find a reputable independent contractor, most people will check with friends and relatives to see if they have any experience with the chosen contractor. However, you should also look at social media and online forums, you’ll find honest reviews and opinions of specific contractors.

It can also help to use an agency as this will remove much of the stress. The labor agency does all the work for you, you simply pay them and request staff when you need them.

Check the Cost

In general, an independent contractor will cost you more per hour than an employee. This is because they have to cover all their own costs, including tax and saving for retirement. However, providing you’re using the contractors occasionally it should still be cheaper than retaining staff. 

That’s why you need a budget. It will ensure the cost of the contractor is less than the cost of hiring a new employee. 

Know The Rules

Even if you hire an independent contractor you should check the local rules. In many cases, the contractor will be classed as an employee if they work with you for an extended period or they have no other clients. It’s worth checking before you commit.

Categories: Business