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Pros & Cons of Hiring Independent Contractor

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Employers may have the dilemma of hiring employees or acquiring the services of an independent contractor (IC). These include freelancers, consultants, seasonal workers, and other temporary professionals. Trends change now and then, which can sometimes confuse companies with which one to choose. A recent study by the U.S. Bureau of Labor Statistics showed that between 6.9 percent and 9.6 percent of all workers are independent contractors, equivalent to 10.5 million to 15 million workers. RELATED: Top Pros and Cons of Contract Work in the Life Sciences Industry Why Do Companies Work With Independent Contractors? Small business owners may opt to hire ICs to help ease the workload and relieve some pressure and stress. Independent contractors are individuals whose job tasks are controlled by the individual rather than the employer. Their skillset helps these companies go about work without the need of hiring full-time workers. Companies that work with ICs reap tremendous benefits and take on sizable risks. Here are the pros and cons you need to consider. Advantages Of Hiring Independent Contractors 1. Cost-Effective Even though most employers pay ICs more per hour than they would pay their employees to perform the same roles, it may still cost them more if they hire employees. Hiring employees will mean paying additional expenses, such as health insurance, social security, state unemployment compensation insurance, retirement benefits, and paid leaves. These types of costs can increase the total payroll and benefits expenses by as much as 20 to 50 percent more per year. Also, you don’t need to worry about buying new equipment, providing office space, travel allowances, and administrative requirements. 2. Additional Help Just like regular employees, ICs can provide the workforce a small business or start-up needs to thrive. Small business owners may have a hard time hiring regular employees because of the additional expenses. ICs have the same skillset that regular employees have, and they are cheaper in the long run. Hence, hiring them can provide additional help and, at the same time, reduced costs. 3. Staffing Flexibility Working with ICs allows the companies greater flexibility and leeway in hiring and letting go of workers. Hiring an IC enables you to hire people when you need them the most. You can increase the workload of ICs when you need their services and not hire them when you do not need them. Hence, the company can’t be sued or face legal trouble that can accompany lay-offs and firings. 4. Reduce Lawsuits Employers who opt for hiring ICs may reduce their exposure to lawsuits. Employees in the country have a broad range of rights under state and federal laws. Since ICs are independent and are not connected with the company, they are not protected by many of these laws. 5. Access to Special Skills When hiring ICs, you can hire freelancers with specialized skills. You don’t have to spend ages finding one person, but you can employ ICs until you find your perfect match equipped with the needed skills and expertise. Also, […]

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