As a business grows, it will happen that you’ll need to either hire employees or independent contractors. There are some advantages to hiring independent contractors over employees – advantages such as not having to pay someone a full-time wage for part-time work. A few more advantages of hiring independent contractors over employees are not having to pay payroll taxes, or provide benefits.
But, it can be a tricky process to ensure that independent contractors remain, in the legal sense, independent contractors and do not cross over to employee status. To avoid these pitfalls, learn these best practices for hiring contractors with which to outsource work for your business needs. However, first make sure you understand exactly what an independent contractor is.
An independent contractor is someone who has their own business providing the services you need. You don’t tell them how to do their job or guide them in any way outside of giving them the parameters for the deliverables. For instance, if you hire an independent contractor to build your house, you provide a plan, as well as a full description of the materials and what you expect to be the end result. But, you do not tell them what days they must work, what hours they must work, nor do you provide them with clothing or tools to perform the work.
An independent contractor’s work can be permanent or temporary, but they must use all their own tools and materials and choose what hours to work. The only guidelines are due dates for work to be completed, and what is expected in terms of quality deliverables. A lot of online businesses hire independent contractors to perform work such as administrative assistance, graphic design, copywriting, marketing, website design , website upkeep and more.
To maintain a contractor status the contractor is in control of what hours they work. You the client have no control over how or times your contractor works other than those initial parameters from your side. By insisting that the independent contractor work certain hours to accommodate your schedule, that they need to clock in and out during those times or restricting how and when they work on your project means they are no longer considered an independent contractor but an employee.
Another term that some small business owners want independent contractors to follow is having the independent contractor “ask your permission” for time off, by requesting this you are making the independent contractor an employee and they no longer qualify as an independent contractor, no matter how you want to list it “legally”.
Now that you understand the difference between an employee and an independent contractor, you can go about finding one to fill your needs.
Get a Recommendation
The best place to find contractors is to ask colleagues who they recommend. Typically, a colleague will have similar criteria as you do, and will only recommend someone that they know will do a great job. Without a referral from someone you know, the next best place is to place an advertisement right on your website about the position.
Create a Clear Job Description
Be very clear in your description of what is expected and your budget in terms of fees you will pay. If you aren’t able to write a clear job description, it’s likely that you’re not actually ready to outsource anything. You should be able to describe exactly the tasks that you want done, how often, discuss your budget, and what tools the contractor will need to provide.
Check References
Once you’ve identified a few candidates, read their resumes and actually check out their references. Don’t just trust reviews that you read online. Call the references to talk to them on the phone about the person you’re thinking of working with. By speaking directly with someone who has worked with the candidate, you’re more likely to get honest feedback. Any upfront independent contractor will already have permission from those they have already done service for, to be able to send new clients their contacts information. When you are interviewing new independent contractors, ask them for the references contact information before you hire them.
Offer Reasonable Pay
The saying, “you get what you pay for” applies to independent contractors. There are plenty of independent contractors who will work for peanuts, but is their work up to your level? The best way to determine what you’re willing to pay is review your own budget plan for your project then talk to the independent contractor about what they can accomplish while sticking to your budget plan. Find out from others what they pay various independent contractors and then finally, check your conscience. If you are earning 150 dollars an hour but want to pay only 5 dollars an hour, something is not right. Pay reasonable wages for reasonable work, pay when invoiced and you’ll find independent contractors who’ll stick with you and do a great job.
Respect Your Independent Contractors Time
Let’s say you have a campaign coming up and you do not email them the work till the day that you want the campaign to start. You cannot expect them to deliver before your deadline, while many will fit you in (some for an extra fee), this causes undo pressure on your independent contractor, which can lead to mistakes. Many independent contractors have several contracts with other small businesses and they work out each week’s schedule to fit everyone’s work in a reasonable amount of time. To expect your independent contractor to drop everything, even in their personal time, to do work you didn’t send to them on time, is unreasonable, and not fair to either your business or the independent contractor.
Pay on Time
Time is Money! When you hire an independent contractor to do a service for you and your business, and they do the job they were hired to do, do not make them wait to be paid. Excuses from business owners on why they cannot pay for the work they received is an injustice to the independent contractor. Do NOT hire an independent contractor if you know you cannot pay. Be honest up front if you need to make a payment arrangement as many independent contractors will work out a pay schedule if you talk to them before they start a project. Remember they do not have a steady paycheck from an employer, so they count on the finished projects to provide for their families.
Fire Sooner Rather Than Later
Within the first 30 days you’ll know whether the independent contractor is right for you or not. If it’s not going well, be honest with your assessment. A lot of issues that come up with independent contractors are due to lack of communication. If you’re not able to communicate effectively with the person you chose then it is not going to work out. Let them move on sooner rather than later so that you can find a more ideal candidate.
By following the above best practices, you’re sure to find the perfect contractors for your business now and in the future.
