Between 25% and 35% of workers are contract workers. They get some or all of their income from side-hustles or other forms of contract work.
From a business perspective, it makes a lot of sense to outsource work to a contract worker. Businesses don’t have to hire employees and save money while getting more projects done.
There is a lot of debate around hiring contractors. You have to make sure that you don’t violate labor laws and get the right contractors in place.
Keep reading this guide to learn how to make hiring contractors part of your HR strategy.
1. Know the Laws
Whether you’re hiring freelancers or a work-to-hire contract worker, you need to know the labor laws in your state.
They’re changing rapidly because there are many more freelancers working in the gig economy. This is often seen as a cost-saving measure by businesses, but the IRS sometimes views it as a way to avoid payroll taxes.
Independent contractors have the ability to pick and choose their clients and hours. That’s the main draw for freelancers.
However, they’re responsible for paying their own taxes and work-related expenses.
Companies can cross the line and misclassify workers that are really employees. You should follow the IRS guidelines to ensure all workers are properly classified.
2. When to Hire Contractors vs. Employees
There are a few guidelines to determine if you should hire a full-time employee or a contractor. Part of your HR strategy should include these guidelines in your decision-making process.
Ongoing work requires the assistance of an employee. There are two exceptions to this.
The first is that you’re not sure of the demand for ongoing work. The second is if you want to work with a contractor then hire them full-time.
If you have project work or short-term work, then hire a contractor. This also makes sense if you outsource to a specialized service provider.
3. Work With an Agency
A staffing agency bridges the gap between hiring freelancers and employees. The staffing agency provides flexibility because they have workers that can work on a full-time contract basis or a project basis.
These services also vet workers. The workers are essentially employees of the staffing agency. You still have the final say as to whether or not you want to work with a particular worker or not.
This can reduce staff turnover because you can work with different people before making a decision to hire them or not.
Hiring Contractors the Right Way
The legal landscape of hiring contractors is murky at best. You can make sure that you avoid legal trouble by hiring contractors through an agency.
You can use the services to do all of the hiring work for you and you can decide later on to hire the contractor full-time. You can also work with contractors on a seasonal or short-term basis. Skills and experience are big plus points here. Becoming a contractor is an important decision in life because it is beyond the ‘safety’ of a full-time job. So people who do contract work may be confident about their abilities, with experience.
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