Reasons to Work with Independent Contractors

Many businesses shy away from independent contractors, and prefer to hire only employees. However, I have found that the reasons to work with independent contractors often far outweigh the benefits of having an employee-only staff. There are certain things that an independent contractor can provide than an employee can't.

Reasons to Work with Independent Contractors #1: Expertise

Often, independent contractors have specialized education in their industry, and can work as a consultant/contractor to help your business to meet its goals. Often, independent contractors will have more knowledge than the average employee, and can provide insights into problems with your company or its production.

Reasons to Work with Independent Contractors #2: Output

Because independent contractors are often paid on commission, they are more likely to produce more output than will an employee. Their goals align more completely with the goals of your company, and this can be a tremendous asset. Paying an independent contractor to complete a project or for each acquisition is more cost-effective than paying an employee by the hour.

Reasons to Work with Independent Contractors #3: Taxes

Independent contractors handle their own taxes, which means that you need only collect a W-9 form and provide a 1099-MISC at the end of the year. This can be a major tax benefit, as you don't have to worry about complicated and expensive employee taxes. NOTE: Taxes for independent contractors can be tricky in their own way; hiring a knowledgeable CPA or attorney will help you to sort out those issues.

Reasons to Work with Independent Contractors #4: Benefits

You are not required to provide benefits for your independent contractors, regardless of how many hours they work. So, while a full-time employee will require benefits, a 'full-time' contractor will not. You can choose the option to offer benefits to independent contractors, but it is not a requirement, nor is it expected. This allows you to pay the contractor for the work performed without having to shell out more money for medical, dental and vision insurance.

Reasons to Work with Independent Contractors #5: Maximum Flexibility

While employees are typically hired for one position, a contractor can be placed where needed. They usually have a more broad knowledge of the industry, and can be utilized for many different purposes. A contractor might work in your billing department one week, but can be transferred to HR or production or any other department the next. Further, independent contractors usually work on their own schedules, which means that you don't have to moderate their work as closely as you would a standard employee.