What to Consider When Hiring an Independent Contractor

In the age of the internet, there are more resources available to small-business owners than ever before. You no longer need to rely on TV commercials or billboards to advertise. Instead, you can gain a following on social media and pay for online ads that reach wider audiences.

The internet also changes how businesses hire employees. Anyone applying for a job has their entire work history online for instant review. More people can find your job openings, but you can also change how you hire as well. Independent contractors have become a popular resource for businesses that need specific skills or employees but can’t hire a traditional recruit.

Here’s what to consider when hiring an independent contractor for your business. There are pros and cons to this method of recruiting that may sway how you approach the idea, so carefully evaluate each tip before making your final decision.

1. They May Not Stick Around

People sign on to be independent contractors for a variety of reasons, but flexibility is one of the main benefits. They can start a job and leave if it isn’t a good fit for them, usually without a standard three-to-six-month trial period. Sometimes this is great for businesses because you can more quickly find someone better suited to the role. Other times, it’s disruptive and not cost-effective, adding on more training time and fees to the next hire.

2. You’ll Save Money

Businesses also enjoy hiring independent contractors because you can save money. You don’t have to pay their state or federal taxes, along with most benefits given to traditional employees. It’s up to the employee to pay taxes on their own, leaving more money in your pocket. Most of the time, all an employer has to do is send the contractor a 1099 form for filing purposes.

3. You Might Need Noncompete Agreements

Employees that will see confidential information often sign noncompete agreements to protect the company during and after working for you. Make sure independent contractors that will handle sensitive data also sign these. It keeps them from quitting and taking the information to a competitor during their employment and sometimes for a specific timeframe after they leave your company.

4. Definitions May Change

Anyone who has worked as a contractor may have operated under a different definition of employment. The fine details of each contract depend on the business and the job requirements.

A construction worker may be classified as a contractor and have specific training requirements, whereas freelance photographers may sign a contract regarding the rights to their photos. Consider the work any future independent contractor will complete to determine what goes in their agreement.

5. You’ll Have Limited Supervision

The limited supervision of an independent contractor can be a pro or a con. If you’re the kind of business owner or manager who needs to give detailed instructions throughout the day, a contractor may not be the best fit because they’re used to operating on their own. Independent contractors with experience will be used to completing work on time without their boss checking in.

Take Your Time

There are many things to review before hiring an independent contractor, like what the definition of their role will be and if you need a noncompete agreement. Take your time to think everything through and enjoy the benefits independent contractors can provide.