Hiring independent contractors rather than full-time employees can save some employers money. You don’t have to pay for overhead or benefits, yet you can have an expert in the field to call on for advice and have peace of mind.
Independent contractors and consultants bring to a company knowledge, experience, best practices and ways to achieve success in a specific area of business.
A consultant enables your business to have an expert at your fingertips to brainstorm ideas, strategize, plan and ensure you are compliant with certain regulatory milestones.
Independent contractors and consultants are both experienced professionals, but they differ in the scope of their work. While consultants usually serve in an advisory capacity, a contractor does the work. Freelancers are similar to independent contractors, but generally work for multiple clients while contractors usually work for just one.
A consultant also can augment a company’s resources from time to time. If an employee is out on leave, for example, a consultant might be able to fill in temporarily. A consultant isn’t new to the field and could get the job done with little or no oversight.
Small businesses may not be large enough to afford benefits and a salary for a full-time employee and might be better off with an independent contractor or consultant. A full-time Human Resources manager, for example, could earn a salary of $80,000 a year or more.
As your organization grows, you may want to bring someone on board in a full-time HR role. A greater head count, for example, can create more requirements. In Massachusetts, businesses with 12 or more employees are required by law to offer sick leave.
Independent contractors might work for themselves or for an agency. If they work for an agency, the contractor is hired through an agreement between the employer and the agency. A consultant is paid by the employer through an invoice.
A word of caution, especially in Massachusetts
Massachusetts employment law has strict regulations for 1099 contractors. To be considered independent, a worker cannot have required hours of work or location. They also cannot do the type of work that could be undertaken by a salaried employee in the normal course of business.
Employers should be cautious not to add to the original scope of work detailed in an agreement with a contractor. A contractor who was supposed to work on a project for three months, but was extended to three years without being classified as an employee could cost the company a hefty amount of money for damages
Taxes are not withheld from 1099 employees’ paychecks, for example, and employers do not make contributions to state unemployment insurance funds on their behalf. Independent contractors don’t receive such benefits as paid holidays or time and a half, and are responsible for their own retirement savings. They also don’t have all the protections employees have under Massachusetts law.
For employers, possible downsides of hiring a consultant or contractor instead of an employee are:
- The consultant or contractor could leave before the job is done.
- The consultant or contractor might not be as engaged in their work as an employee.
- The hourly rate for a contractor or consultant might be higher than an employee’s pay, reducing expected cost savings.
- There might be gaps in how the consultant understands the organization’s culture.
- A large consulting firm might send a recent graduate with little or no experience to do the job. Be sure to hire an expert in the industry.
Possible downsides of working as independent contractors or consultants are:
- Being responsible for paying their federal and state taxes, and obtaining their own benefits and licensing.
- Their work may be high pressure with strict deadlines.
- The work could involve long hours and negatively affect work-life balance.
- The work can be lonely because they work remotely and have little contact with other people.
What consultants can do for small businesses
HR consultants like myself can help small to mid-size businesses by offering services tailored to your needs. They can help you find top talent, reduce paperwork and increase productivity. HR consultants will bring a fresh perspective to your company and enable you to see your business in a new light. They will oversee the day-to-day HR tasks while you focus on the growth of your company.
If you would like to discuss the pros and cons of hiring an independent contractor or consultant, contact me at email@example.com.
50+ Job Seekers workshops
The 50+ Job Seekers Networking Group’s workshops are free and virtual on Zoom.
The remaining workshops for August are:
- Monday, Aug. 15, 10 to 11:30 a.m.: “First Impressions Matter Interview Practice” with Ed Lawrence, a career coach. He will discuss how to put your best foot forward during an interview.
- Wednesday, Aug. 17, 6:30 p.m., Southwick Public Library presents “Discrimination During the Job Search”: Ed Lawrence, a career coach, will lead a discussion of the many forms of discrimination you might face during a job search and what to do when you encounter discriminatory practices.
To register, send an email to firstname.lastname@example.org and say you would like to attend the program. The library will send you a Zoom link. The discussion is expected to wrap up between 7:30 and 8 p.m.
- Thursday, Aug. 18, 3 to 4:30 p.m., Special Event Series: “Where Have I Been and Where Am I Going?” an interactive workshop with Allyn Gardner, whose experience in coaching includes 25 years of corporate talent acquisition. He will help participants take a close look at past work experiences to determine what worked and what didn’t to guide them as they pursue their next career opportunity.
Register in advance at https://us06web.zoom.us/meeting/register/tZIudOCoqjwoGdbAtoMq68kgJMBE0EDOJ8PJ.
- Tuesday, Aug. 23, 10 to 11:30 a.m.: “What’s My Message?” interactive workshop with Ed Lawrence, a career coach. The group will discuss how to create a compelling marketing message that explains who you are and what you offer. Participants will consider these questions:
- What are you known for?
- What is your expertise?
- What makes you different?
- Why should we hire you instead of someone else?
- Thursday, Aug. 25, 11 a.m. to noon, Savvy Seeker Series: “Insuring Your Career … at New York Life,” with Bill Terry, executive partner of the Boston General Office of New York Life. Learn about career opportunities with New York Life.
Register in advance at https://us06web.zoom.us/meeting/register/tZcsd-mvpzIiG9fap0Himc8d9Gcf6KJXTDLJ.
Use this link for programs that don’t have registration details:
The virtual doors open 15 minutes before each program starts. If you have questions, email us at email@example.com.
Drop me a line
You can reach me by downloading my digital business card by texting HRPRO to 21000 or emailing me at firstname.lastname@example.org.