independent contractors

Independent contractors can be a real asset to your business.

Unlike employees, independent contractors do not cost you money for sick leave, bonuses, vacations, arriving late at work and they myriad other things that employees so often take advantage of.

Their livelihood depends on consistently delivering high quality work, where one bad performance can ruin their reputation and jeopardize future assignments with a company.

Competent independent contractors require very little management or supervision. With the availability of freelancers on the internet, they can even be in another country and as such you never need to become personally involved with them, so objectivity can be maintained and inter-office politics do not come into play. Whereas the style of work of any one employee can become staid, a variety of independent contractors can ensure a fresh approach to different projects.

Your employment contracts may make provision for overtime to be worked by employees when the business requires it. Even so, some employees are quick to find excuses as to why they cannot do overtime just then. An independent contractor on the other hand sees any assignment as a business opportunity, regardless of whether it demands working over a weekend, public holiday or after normal business hours.

Unfortunately for independent contractors, it is often either feast or famine, so if there's work on offer they tend to grab it, regardless of whether they already have a heavy workload. The situation might then arise that they can't meet your deadline, but you will quickly learn whom you can always rely on.

If an employee were to abscond, you have to follow the proper statutory procedure e.g. wait the appropriate period to establish their non-return, send the required notices, hold a disciplinary hearing (even in absentia) and then dismiss. This all takes time and costs the business money. With an independent contractor your agreement will stipulate "no work, no pay" and you can employ a replacement immediately.

Independent contractors are generally appointed based on a portfolio of work, reputation or referral, which should be proven evidence of competence. If, for whatever reason, you find yourself with someone who does not deliver, it is relatively easy to terminate the agreement. It is crucial to have a comprehensive agreement in place to clearly establish their status, determine the payment schedule, confidentiality provisions and ownership of work.

There may be legal or practical reasons why a business cannot classify a large portion of their employees as independent contractors. However, if contractors are used in conjunction with permanent staff, their work may challenge employees and motivate them to better performances.

For the employer, it's a win-win situation.

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Finn Sawyer

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