Running a business is thrilling, satisfying, complicated, a balancing act, and a myriad of decisions. At some point, if a business is to be run successfully, some help will be needed to keep everything running smoothly.
A common decision business owners face is whether they should hire employees or independent contractors to help continue to grow the business. In many cases, especially for small businesses, independent contractors are the way to go.
Finding the Right Person for the Job
Many qualified workers enjoy the flexibility that comes along with freelancing. Particularly, the millennial generation enjoys the freedom that comes with determining when, where, and how they work.
It’s now easier and faster than ever to find qualified gig-based workers by using online platforms. The right online job board, like Upwork, can link you to an experienced, reliable and capable freelancer for a variety of projects. Whether you are looking for administrative support, IT, someone to operate sales and marketing, graphic design, project management, or web development, you will find what you need.
For free, you can post job announcements and connect with candidates. For a small fee, you can work to find specific talent and have some vetting done for you. To connect with the right candidate, you will need to start with the following information:
- Area of expertise you are looking for.
- Type of help you need.
- Length of the project and complexity (i.e., long-term or short-term; simple or complex).
- Specific timeframe (e.g., start in a month; periodic work; three-month project).
- Level of experience you need to get the job done.
Financial Benefits of Hiring a Freelancer
There are benefits to hiring employees and independent contractors, so it really is based on each company’s needs. One of the perks of hiring an independent contractor is that you and your business are not responsible for withholding Social Security and Medicare taxes, paying for state unemployment compensation insurance, or paying for workers’ compensation insurance.
Additionally, you do not need to ensure the freelancer has a workspace, training, benefits, or supplies. Typically, independent contractors are responsible for supplying the necessary tools to do their job. While you aren’t responsible for paying FICA and FUTA taxes, you are responsible for the following:
- Obtaining a Form W-9 from each independent contractor.
- Providing each contractor with a 1099-Misc.
- Submitting information to the IRS as required.
You Can Rest Easy
Freelancers who take on the risks associated with being their own employers have a certain sense of confidence in their work. They believe they are capable and have the experience and talent. More times than not, your independent contractor will aim to please in order to ensure that you continue to hire them, that they can use you as a reference, and that you will refer them to others. They require no supervision and are independently in control of their work.
During the interview process, make sure they meet these qualifications. Then you can rest easy knowing they will complete the tasks you hire them for.
When in Doubt
Sometimes it can be hard for employers to determine whether a worker should be classified as an employee or an independent contractor. After you have examined the scope of duties, control, and supervision, if you are still in doubt, then ask. You can submit IRS Form SS-8 to request a formal written determination from the IRS.
When business is doing well or certain skills are needed to grow your business, then it’s time to bring on some help. At that point, you will need to decide whether to hire someone as an employee or as an independent contractor. Unless you need to hire someone full-time, supervise their activities, and provide them all the resources to do their job, then you should consider hiring a freelancer. Online boards now make it easy to find qualified candidates. The financial benefits and ease associated with hiring an independent contractor can make all the difference in your business.