One of the toughest decisions that many business owners are forced to make while working on particular jobs is deciding whether to use employees or to hire freelance contractors. There are several reasons why a company will want to work with an independent contractor as apposed to utilizing the services of an employee. Here are the top five benefits of using freelance contractors the next time you are considering help for a particular job within your organization.
1. The Financial Savings
When you hire freelance contractors, your company is going to save a significant amount of money. When you hire an independent contractor, it might cost you more per hour initially to pay them to do the work, but in the long run the savings will add up quickly. The company will not have to be responsible for employee benefits, insurance compensation, and Medicare or Social Security taxes. That huge percentage of payments that you pay for employees gets to stay in your pocket. You can expect to put back 20-30% back into your payroll not having to pay for all those employee benefits.
2. More Efficient Workers
When your company needs to have a certain task completed, one of the advantages of bringing in freelance contractors is they come with a specialized skill that allows them to get right to work. If you need to have an employee perform the same job, they will most likely need specialized training to be able to perform at a high level. By bringing in a person who already has the training and skills and can jump right in on the job, you cut down significantly on the time needed to complete the job. The independent contractor is more efficient because they bring with them these specialized skills needed to get the job done.
3. Increased Employee Productivity
When you are hiring a freelance contractor to perform a certain task, employees are well aware that they need to work at a higher level so they are not replaced. When a company can let go of employees more easily, those employees on staff work much harder to keep their jobs. The freelance contractors can fill in the gaps as the employees continue to handle their current workloads. When you hire a contractor to do a job that is not going to be an ongoing position, you do not have to worry about firing or replacing them. They understand they are on the job for one purpose and will be gone when completed.
4. Reduction in Lawsuits
The employees of a company are afforded a certain amount of rights that protect them during their time on the job. If any of those rights are violated, they can easily request professional representation and file a law suit. When you hire freelance contractors, they have less in the way of rights that are available to them. The contractor cannot bring a law suit against the company for minimum wage, overtime compensation, sick leave, or new child leave. This reduction in the ability to bring lawsuits against the company is a huge relief and could potentially save the company a significant amount of money and time in the courts. Contractors for various industries can get their own insurance instead or request insurance quotes from brokers found on ContractorNerd.com.
5. Terms Are Clearly Laid Out
When you hire freelance contractors, the contract that you sign clearly lays out all of the terms of the work being completed. In that written agreement you will also have clearly defined terms as to what constitutes the right to fire the contractor. With an employee, the reasons for firing concerning work productivity can be in a grey area. With an independent contractor, if they do not perform as per the terms of the contract, you have the right to fire them immediately. This makes things crystal clear for both sides, allowing everyone to focus on work and not all the formalities.