Thinking of Hiring Independent Contractors for Your Business? Here's the Truth About Contractors

Rieva Lesonsky
Fri, 15 Mar 2024 13:30:00 +0000
Business-culture, Freelancers, Gig-economy, Hiring-freelancers, Independent-contractors, Management-skills, Permanent-employees, Specialized-skills, Workplace-distractions

Does your small business regularly hire independent contractors or freelancers? If so, you’re not alone. One poll shows that 70% of small and medium-sized businesses have worked with a freelancer at least once, and 83% agree that these independent contractors have greatly helped their business.

Are you among the many small business owners who are hiring freelancers, or are you missing out on an opportunity by skipping this trend? Whether your business already hires freelancers regularly or you haven't tried it yet, here are some myths and realities about hiring independent contractors that you should understand.

Myth: You can't control independent contractors.

Reality: You can't micromanage independent contractors—that much is true. Telling an independent contractor exactly how to do his or her job would put you at risk of fines and penalties from the IRS. The agency has strict rules regarding how much control an employer can exercise over an independent contractor’s behavior. (Learn more about the difference between independent contractors and employees.) However, providing detailed explanations of what you want from the freelancer, combined with explicit contracts laying out your expectations, will help ensure you get the desired results from the independent contractor's work.

RELATED: What Businesses Need to Know About Classifying Employees and Contractors

Myth: Managing independent contractors will take up too much of your time.

Reality: Independent contractors skilled in their fields often have decades of experience, which means they can typically hit the ground running. True, you will have to get them up to speed on your business culture and the specifics of each project, but you won't have to train them from the ground up as you might with entry-level permanent employees.

Myth: Independent contractors are too expensive.

Reality: One of the biggest advantages of hiring independent contractors is that you can find them at a wide range of price levels. Of course, the adage that you get what you pay for is also true; if you're looking for specialized skills or lots of experience, you will have to pay accordingly. However, because independent contractors can laser-focus on your project without the distractions of the typical workplace, they’re likely to get things done more efficiently and effectively than many employees.

RELATED: Contract 101 When Hiring Freelancers

Myth: Your employees won't like working with independent contractors.

Reality: Incorporating independent contractors alongside employees is standard practice in many industries. In fact, your employees are likely to welcome freelancers who can take time-consuming tasks off their plates. (Wouldn’t you rather have a freelancer to help shoulder the workload than do the work of two people yourself?)

Where problems arise is when employees feel you're asking them to train a freelancer to ultimately take over their jobs. Smooth the relationship between your employees and your freelancers by letting employees know how much you value them. Put them in charge of managing freelancers—they will gain management skills and confidence, and maybe even learn a few new things from the freelancer.

Myth: Why should I bother working with an independent contractor? They’re just going to leave.

Reality: Finding the right independent contractor may take some time. But when you find a freelancer who understands and can deliver what you want, it’s often the beginning of a beautiful friendship. Many business owners work with the same independent contractors over and over again for years or even decades. In fact, building a "stable" of regular freelancers that you can rely on can help your business through ups and downs. Maintaining good communication, setting clear expectations and treating your independent contractors fairly will help build a lasting relationship that benefits your business in the long term.