Here is What You Need to Know Before Hiring an Independent Contractor
Hiring an independent contractor can be a great option if you don’t want to hire a new permanent employee, but you need to understand the pros and cons of making that decision.
The Pros of Hiring an Independent Contractor
One great reason to hire an independent contractor is to save money for your business. When you hire a new employee, you have expenses such as training, acquiring the proper equipment, and providing office space. Since independent contractors usually provide all of that themselves, you don’t have to worry about it. All you need to worry about is paying the contractor their fee.
Independent contractors also provide increased flexibility. Simply put, you can find contractors for practically any task if you look hard enough. For example, if you only need a copywriter for a specific project, you should be able to find a good freelancer who will be up for the task. This is also a great solution if you temporarily find yourself with an increased workload. Rather than hire new employees for what amounts to temporary work, it simply makes more sense to bring in independent contractors instead.
The Cons of Hiring an Independent Contractor
While there are plenty of benefits of hiring independent contractors for your business, there are some drawbacks. First of all, an independent contractor may not have the kind of loyalty to your company that a permanent employee would have. A good contractor is a professional who will complete the expected task, but they won’t have any stake in your company once their job is done. Independent contractors come and go as needed, which may not be ideal if you want to develop working relationships with long-term employees.
When you hire independent contractors, you also need to keep certain legalities in mind. You need to make sure that hiring contracts and the related paperwork are in order, and you need to make it clear that your new workers are independent contractors and not new hires. The IRS has audited companies to make sure that their employees haven’t been misclassified as independent contractors to save money on their taxes. If you want to avoid an audit, keep all of your paperwork in order.
For more information about hiring independent contractors and to find out if they are right for your business, contact Toluca Lake Capital today. We’ll be happy to answer any questions that you might have.