Benefits of Hiring Independent Contractors for Small Businesses

Benefits of hiring independent contractors are often ignored by small business due to the efforts involved in the whole process. Read to learn more!
benefits of hiring independent contractors

Small businesses often face the question of how much permanent staff to hire. With resources usually being tight, employers need to decide whether or not it is worth it to them to hire people for permanent positions. However, in most cases, they pay attention to the benefits of hiring independent contractors.

In many cases, the answer is no. Small businesses generally don’t need a huge staff to keep going. Let’s take a look at some of the advantages of hiring independent contractors and see how this can help small businesses.

Hiring Independent Contractors Is Cheaper

Employing independent contractors instead of full-time employees can be much cheaper for small businesses. This is the case for a variety of reasons:

1.They Will Pay Their Own Taxes

This can take up a large percentage of a given employee’s salary, so if you are paying employees what they ask for, it means that the gross rate that you pay will have to be substantially higher. Cutting this out will reduce costs significantly.

2. You Won’t Have To Pay for Insurance

Insurance is also a big drain on company resources, which is why many companies are reluctant to give it to their employees. Many companies are expected to give dental and medical, and sometimes other kinds of insurance, and this can all can add up if an employee has a family or a complicated medical situation. With independent contractors won’t have to worry about this.

3. You Won’t Have To Give Paid Vacation Days or Other Benefits

Contractors work for the number of days they are contracted for, and that’s all. Although the number of days they are legally allowed to work for any one company per year is limited, you can determine how a given contractor’s time can fit your needs and utilize him or her accordingly.

You Have the Option of Choosing Fresh Talent With Each Hire

It is a known fact that people tend to slow down after working in the same job for long periods of time. Long-term hiring can create difficult situations where people remain in positions that could be filled more efficiently and in general, better. For many years, it was understood that people would join a company and stay there throughout the entire course of their careers, but this leads to problems for employers:

1. People Get Burned Out

Knowing they are locked into their jobs and probably won’t be fired, unless they do something particularly egregious, there is little incentive for people to excel and therefore, they often don’t work as hard. This complacency is usually a side effect of comfort or burnout.

2. Industrial Advancement

Young people who have received the training necessary to take on these new technologies have a big advantage over people who haven’t. If workers have been sitting behind the same desk for 20 years and don’t get training in contemporary skills, the company loses as a result.

3. New People Can Bring New Energy to Companies

Not only can individual long-term employees get burned out, but groups as a whole can lose steam if they don’t have fresh blood coming into them. The benefits of using an independent contractor are many: new ideas, fresh personalities, and many other advantages are brought to existing groups.

Reduced Bureaucratic Work for Employers

A related advantage for employers is that there is much less paperwork involved in companies hiring contractors. Just as paying full-time employees costs money, so too does it create a lot of extra work for employers. The time necessary to fill out tax forms, insurance forms, and carry out many other bureaucratic procedures adds up. And the more full-time employees a company has, the more that company will have to repeat the same processes!

In taking on an independent contractor, businesses have the contractor fill out a printable independent contractor agreement. This agreement ensures that the contractor is legally bound to carry out his or her duties, and sets forth the details of the agreement.

Edge Over the Competition

A logical consequence of these other advantages, then, is that businesses who utilize contractor talent will have an advantage over the competition. Businesses that are able to work out exactly how much and what kind of tasks they need accomplished within any given time period will be able to streamline exactly those procedures for the right workers. In general, it is extremely difficult for companies with a permanent staff to accomplish this for a number of reasons:

1. Workloads Are Often Given in a Static Manner and Long-term

To change a given employee’s job description means completely reconsidering their position, and generally means changing his or her benefits package, the position in the company hierarchy, etc.

2. Each Employee Affects the Others

If one person’s workload is adjusted, others’ usually should be, as well. This results in a professional nightmare for employers, who have to overhaul their entire operation in such situations.

With contractors, on the other hand, workloads can be adjusted with each short-term contract for exactly what needs to be accomplished at any given time. This puts the company at a distinct advantage vis-a-vis companies that don’t use this approach.

It’s the Way of the World

As can be seen, independent contractor benefits are many. The world is increasingly moving in the direction of filling tasks as they come, rather than pre-determining workloads far in advance. For millennials and Generation Z, the idea of staying in one position in a single company for life, or even for several years, is unthinkable. This is because people as a whole are now thinking much more practically about how to make businesses function successfully and keep up with the competition as it increases.

There are some drawbacks to using contractors. People can drop out in the middle of an assignment or prove to be unreliable. But figuring out what you’re looking for in advance and doing some background checks will help minimize the possibility of serious issues.

Nonetheless, the benefits of hiring independent contractors far outweigh the drawbacks when it comes to many different types of needs. Not all roles will be filled this way – you’ll probably want your General Director to be full-time, at least – but many will. And your company will be better off as a result.

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