Independent contractors are gaining popularity with small business owners and entrepreneurs. After all, there’s a lot more flexibility and at much lower costs to hire a contractor.
Many entrepreneurs who decide to hire independent contractors are faced with the same risks. How do you know you’ve hired the right person? Are there really more benefits to hiring independent contractors vs hiring employees? We can answer these questions by breaking down the differences between contractors and employees, exploring the common challenges, and taking a look at the Small Business Marketing Studio’s risk-free model to a successful hire.
Independent Contractor vs. Employee
There are many differences between employees and contractors, and once you are aware of them, it should be clear which approach works best for your management style and business in general. One of the main differences that is discussed often is from a legal standpoint, for tax purposes, but there are numerous other differences that come with advantages and disadvantages.
Advantages to hiring a contractor:
- Less paperwork, they are responsible for their own taxes
- Are not given benefits, and not eligible for unemployment insurance
- Specialized expertise, useful for projects or short-term events
Disadvantages to hiring a contractor:
- While you are able to set deadlines, you cannot control how they get their work done
- Contractors can work for other businesses
- You cannot set their hours
Advantages to hiring an employee:
- More control, you can train and direct employees to get the job done exactly how you’d like
- You can require employees only work for you and set the hours
- Broader scope of work, you can train them for how you want to use them
Disadvantages to hiring an employee:
- More paperwork, must withhold, deposit, and report employment taxes
- Eligible for unemployment insurance
- Employee turnover is costly
As you can see, there’s a pattern to it. The benefit to hiring one is a direct disadvantage to hiring the other. The IRS has a great fact sheet to help you with the decision. In general, independent contractors are more flexible for your business needs, but you have less control over how they work and what else they’re doing. Employees give you more control, with more paperwork and legal steps.
We must also take a deeper look at the cost of employee turnover. On average, it ranges from tens of thousands to twice their salary. You’re paying for their errors, onboarding, training, lower engagement, etc. There are different formulas and costs to take into consideration when calculating the cost of employee turnover, here’s a guide. As mentioned above, the disadvantage to one is to the other’s benefit. By hiring an independent contractor, you know their experts in their field and can avoid not only the majority of paperwork, but time-consuming trainings and costly errors.
Challenges of Finding an Independent Contractor
Most of the time, you’re faced with the same dilemma and risk no matter if you decide to hire an employee or an independent contractor. There’s some level of uncertainty whether or not they’ll carry out the company culture to your standards and be a good fit overall.
Many entrepreneurs struggle with where to locate high-quality contractors and turn to placement agencies, but at a high cost, with contracts and unexpected fees along the way. There are various sites that offer online independent contractor resources, but you’re stuck with vetting thousands of potential contractors. You can also post a notice on your website but remember to send that message out through the appropriate and high-volume channels.
It all comes down to risk. You can spend hours of your precious time marketing, searching, and vetting, but there’s still the chance your top candidate(s) won’t be the right fit.
There’s good news for those business owners who have undoubtedly faced this challenge: The Small Business Marketing Studio removes these risks for you, giving you back your time and peace of mind.
The Small Business Marketing Studio Approach
The Small Business Marketing Studio matches you with the perfect contractor, or rather, the top three perfect contractors that you are able to choose from after viewing their portfolios. This is accomplished with no startup fees or contracts, and if it’s not working out, SBMS will find you a new contractor at no additional cost, or you can cancel your subscription altogether – at any point.
There are multiple packages to choose from, starting at 10 hours per month, but no matter which package you choose, you can upgrade, downgrade or cancel at any time. Here is a list of some of the items that all packages include and that are not counted against your monthly hours:
- One Hour Complimentary Kickoff Meeting
- Monthly 30-Minute Consultation
- Monthly Analytics Review & Report
- Dedicated Marketing Professional
- Access to a client support representative
- Trained backup to cover vacations or illness
- Private dashboard
- No extra charge for additional users
- Access to multilingual services
- Access to our entire team for specialist tasks
All of the risks you’ve been warned about when hiring an independent contractor are mitigated by SBMS. It’s set up for you and the success of your small business. Transparency, accountability, and flexibility are the driving forces that SBMS exemplifies to ensure you’re optimizing your time and money. Check out the packages and learn more about how it works today.