Your business has been booming and revenue has been steadily increasing for quite some time now. However, your current team members seem to be maxed out to their fullest workload capacity. You know that you need to hire new employees in order to continue successfully growing your company, but what is the best approach that is both cost-efficient and ensures quality onboarding? If you haven’t explored the possibility of hiring an independent contractor, then now may be the right time.
Hiring full-time employees may be a solid way to secure long-term help if you have the consistent capital and workload to offer them. However, there are several employee alternatives that you can pursue as well.
If you’d like to regularly save on expenses without compromising on the quality of the work you earn in return, one of your options include outsourcing tasks to an independent contractor.
Independent contractor benefits range in nature and run the gamut, with perks related to better control of your finances, business management, and more. Depending on the type of work that you need taken care of, and how frequently you need it accomplished, contracting work to individuals may be the best option for your business, especially financially.
Below are some of the pros and cons of outsourcing contract work to an independent contractor over in-house employees.
Hiring somebody part time could be the smartest option for you in regard to your bottom line, especially if you don’t have 40+ hours of work and thousands of dollars to offer somebody in-house every week.
When you work with a freelancer or independent contractor, you’re not obligated to offer them:
Saving on all these expenses helps you cut down costs in the end.
Working with independent contractors gives you the flexibility to scale assignments as you need to. Whether you choose an hourly rate, a flat fee, or another contract term, utilizing independent contractors gives you the option to scale resources as you go.
When you have more work, you can choose between assigning to employees or outsourcing it to independent contractors.
Employed individuals must answer calls and emails around the clock, but independent contractors work on their own time. If you hire freelancers or contractors, you must be aware of and willing to deal with this level of availability and communication.
Because working as an independent contractor affords more freedom over their schedules and work-life balance, it’s popular with younger professionals. Many millennials tend to launch their own small businesses after developing skill sets at larger companies that enable them to then go off on their own, sharing their experience with a wider variety of clients, customers, and businesses, including yours.
While you can’t expect constant communication or immediate turnaround, you can expect the level of talent that comes with their experience.
There are several tax benefits that come from hiring independent contractors. The biggest one is that you do not pay their taxes, as you typically would with a full-time staff member.
Instead, it’s the independent contractor’s responsibility to pay the estimated tax on their revenue earned every quarter – not yours.
After receiving the contractor’s signed W-9 form, all that you owe them is the agreed upon payment for each project. At the end of the year, you’ll also provide a 1099 tax return form so they can process their own taxes.
This removes the burden of payroll tax off your shoulders, while still putting new skill sets at your disposal.
Regardless of the work you need done, you can find an experienced independent contractor who’s right for the job.
If you need help with digital marketing or admin work, you can hire a writer or bookkeeper with experience. Or, if you need an extra hand for manual labor, you can find a landscaper or general contractor.
There are experienced independent contractors of all levels that specialize in various areas of expertise and are readily available for hire.
This also reduces the amount of paperwork needed for onboarding, and eliminates the need to spend extra time, money, or resources training them.
It’s your decision how regularly you will conduct business with an independent contractor, depending on whether or not you’re happy with the quality of the work they produce.
If you’re unhappy with their work ethic or general productivity, or just don’t think you’ve found the right match for the job, you’re free to find a better fit with no strings attached (within the terms of your contract).
However, this is a two-way street.
Although you’re hiring an independent contractor, ultimately, you are the client of a contractor’s business. They reserve the right to terminate your working relationship at any point for any reason as well.
Regardless of how your relationship ends, you don’t owe them job security, unemployment benefits or a severance package if one of you chooses to move on.
If your business is growing and you could benefit from a low-cost way to accomplish more, then hiring independent contractors might be the right move to make.
There are several independent contractor benefits to consider if you’re in need of extra help or a new skill set. Ultimately, this is an excellent way to accomplish more in your business without incurring the costs of a full-time employee.
Despite the cost benefits, pursuing new growth opportunities can still add a hefty expense. Having immediate access to funds in order to comfortably afford hiring new help as you need it can go a long way—for your budget and your goals.
At National, you can get the financing you need to hire the right people as soon as possible. Our 1-minute application opens the door to programs through 75 lenders, giving you the chance to choose what’s best for your business and goals.
ALong the way, you’ll have the chance to hear from a Business Financing Advisor who will help you explore your options and answer your questions.
Get started by applying now!
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Matt Carrigan is the Content Writer at National Business Capital & Services. He loves spending every day creating content to educate business owners across every industry about business growth strategies, and how they can access the funding they need!