Thirty-six percent of adult workers currently partake in some form of gig work, and the gig economy is predicted to grow exponentially in the 2020s.
For employees, contract and freelance jobs tend to allow more freedom and flexibility.
And for employers, working with independent contract workers can have productivity and financial benefits.
If you’re considering hiring a freelancer or contractor for a position, be sure to factor in the following logistics.
Ensure a Contract Worker Is the Right Fit for the Job
When bringing on workers for a new role or project, you should consider a few different factors before deciding on an employee or a contract worker, including the following:
- How closely do you need to supervise the worker? If you need to closely monitor the work and dictate how it’s done, you’ll have more control working with a traditional employee.
- How long will you need the worker’s services? If you only need the role fulfilled for a few months or for the duration of a specific project, it makes sense to bring n a contract worker or freelancer.
- What’s your hiring budget? Keep in mind that you do not have to provide most benefits to contract workers and will not deduct income taxes from their paychecks. For that reason, many contractors expect slightly higher hourly wages. Depending on how long you contract them, it may or may not be cheaper to hire an independent worker over an employee.
- Can the job be done remotely? If so, it can save on tech and facility expenses to hire someone that never has to come into the office.
- Do you need the worker to work specific hours? If so, you may need a traditional employee so you can determine their schedule.
Understand Tax and Insurance Logistics
- Employee Classification and Taxes– While employers are required to pay income tax on employees and report this to the IRS, independent contractors who are self-employed handle their own taxes directly. To ensure IRS compliance, make sure you classify all your employees correctly based on the nature of their services.
- Insurance Coverage– Whether or not a business legally has to provide workers’ compensation insurance for 1099 independent contractors depends on state-specific laws. Many employers extend other forms of insurance coverage to contract workers to protect themselves against liability claims. For example, businesses often include freelancers and contract workers on their general liability insurance if those workers work on clients’ property. You can click here to learn more about liability insurance for 1099 independent contractors.
Define the Role
One of the most important parts of hiring a contractor is knowing exactly what you want them to do.
Unlike with employees whose role can be shifted once they start as needed, contractors will want a signed contract before they begin work that lays out their exact job duties and the duration and scope of the job. For an extended job, discuss possible eventualities and the possibility of extension if needed.
Contract workers often work on short-term projects, but a positive employer-contractor experience can lead to a fruitful long-term business relationship.
Start Your Search
To find the right contractor for the specific job, it’s important to look where the talent is.
Posts on general job boards might get you a good candidate, but you’ll likely have to sort through a lot of applications. You’re likely looking for a person with deep experience in the field, so visiting industry or role-specific boards may help.
It’s critical to be specific when putting up a job listing for an independent contractor. Post the job duties and length as clearly as possible. Not only will this attract people with specific skills, but it’s an easy way to weed out the unqualified in interviews.
A detailed job listing allows applicants to develop their first thoughts about the project before the interview, giving you a way to determine which candidates have an approach that meshes with yours.
A Contract for Success
Working with 1099 employees can open up a world of opportunities for employers.
For example, if you’re working on a project that requires expertise outside of your typical work, bringing on a freelancer allows you to temporarily hire someone with highly specialized skills.
If you do decide to take this route for your next hire, be sure to review your legal responsibilities and understand the best practices for employing contract workers in your industry.