If your recruiting efforts have ever focused on bringing independent contractors on board, you know that it’s not always the same process as bringing on a regular employee.
There are differing considerations, as well as differing ways to go about your recruiting efforts. Let’s take a look at some of the reasons why many organizations are recruiting independent contractors, as well as some of the potential pitfalls of doing so. Then we’ll take a look at a few tips in the recruiting process.
Why Recruit Independent Contractors?
Employers today are discovering that there can be a lot of benefits to utilizing independent workers. For example:
- Even with higher per-hour costs, independent contractors often save money for an organization because they cost less in other ways. For example:
- Independent contractors aren’t paid benefits.
- Assuming the individual is correctly classified, there is no requirement for the employer to pay the employer portion of the contractor’s income taxes.
- There are less administrative requirements (no I-9 forms, no other paperwork).
- They are not covered by workers’ compensation insurance.
- They are not covered by unemployment insurance.
- There are usually no expenses related to equipment, office space, travel, etc.
- Training costs are usually either unnecessary or minimal.
- There are fewer legal liabilities since the individual is not an employee.
- Hiring an independent contractor can be a way to fill a temporary need without having to later fire or lay off workers when the project ends. This means the employer can more easily plan around surges in demand, seasonal needs, or short-term projects.
- Using independent contractors can occasionally act as a long-term job tryout of sorts, with minimal risk to the employer; if you like the contractor, you could offer regular employment later.
- Utilizing contract workers can be an easy way to fill in for long-term absences of full-time employees.
- Independent contractors may come with specialized skill sets that are difficult to find; hiring them could allow the organization to fill a specialized need.
Potential Pitfalls to Watch Out For
When hiring independent contractors, there are a lot of benefits, but there are also potential pitfalls, too. Here are a few to watch out for:
- An independent contractor may not be available again the next time you need the same work to be completed. This means you may have to restart the search for a good contractor. Alternately, if you’re using a temp service, it may send a different person each day or each time you hire him or her. This can lead to inconsistent output in some cases.
- While training costs are typically minimized with independent contractors, there may still be some expense—especially if you have specialized processes or programs you’ll need to train them on in order to do the task at hand. If the training required is intensive, it may be difficult to realize any financial gain from hiring a contractor rather than an employee.
- The employer has little recourse if the job is not completed as professionally as desired. The contractor may already have moved on before the problems are even discovered.
- Unlike with an employee, contractors typically have little to no incentive to go “above and beyond” the exact duties required, especially if they have no reason to believe they will be rehired later.
- Full-time employees may fear that the hiring of independent contractors means their job is at risk. This could negatively impact employee morale.
Now that we’ve outlined some of the benefits and drawbacks of hiring independent contractors, stay tuned for tomorrow’s Advisor, where we’ll discuss how to recruit independent contractors.