How can businesses benefit from hiring contractors?
Reducing costs and increasing quality are critical in any strategic planning. Your workforce plays a key role in achieving this. But that doesn’t necessarily mean working entirely with an in-house team. A contract workforce can provide a viable alternative solution.
Independent contractors are the ultimate solution when you need talent to perform a specific task for a limited period of time, without the hassle of onboarding permanent employees. It’s a great way of accessing niche skills that can’t be sourced in-house. And because you’re typically working on a short-term basis, without the expenses traditionally associated with taking on a new-hire (medium and large-sized businesses need to be aware of the rules surrounding IR35), it can offer a highly cost-effective and flexible solution.
While contractors are not right for every project, they are always worth considering. But it’s also important to reflect on the following before hiring a contractor.
Why hire an independent contractor?
The easiest way to assess the viability of working with contractors is to understand why other companies hire them. Here are some of the reasons:
- Access to skills: Hiring contractors has the benefit of allowing companies to adapt quickly to changing skills requirements
- Organisational flexibility: Having the flexibility to increase or decrease staff numbers according to changes in the market and the wider economy.
- Fast access to new tech: Hiring in fast-growing fields, especially in the technology industry, can be time-consuming. Finding a consultant in one of these areas, will usually be less time-intensive than finding the perfect employee
- Ease of termination: Terminating an employee’s contract is inevitably red-tape laden. It is possible, but it’s never quick. Contractors who are not classed as employees under IR35 have no legal right to a notice period. As a good business manager who intends to work with other contractors at some point in the future, you probably won’t want to exercise that right. But. Nevertheless, it does make the termination of contracts considerably easier.
- Lower overheads: If you are a business working with contractors, you don’t need to worry about company benefits, holiday pay, sick pay, employer taxes, pensions, or superannuation payments.
- Reduced legal liability: In many cases, employers are required to protect their employees against liability for injuries incurred on the job – contractors, however, are independent contractors and must provide their own insurance
How do you know if hiring contractors is right for your business?
Working with contractors carries both pluses and minuses. You have a whole new set of legislation to deal with for one thing, and as your company grows, you will need to be wary of breaching IR35 regulations. There are also the issues of finding the right talent to work with, managing payments and contracts, and ensuring the integration of contractors with your in-house team. But there are ways of dealing with all of these matters – an umbrella company can help you with most of them. And contractors bring flexibility as well as a wealth of in-depth knowledge and experience to your team, enabling you to benefit from the best of both worlds.
Whether you’re considering the use of a contingent workforce on a temporary basis, or as an integral part of your long-term strategy, contractors present an appealing proposition that can transform the way your business operates.
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