Using Independent Contractors, Part 1: Pros and Cons

I have many clients in growth stages (phew!), and the owners frequently come to me with: “I’ve grown pretty significantly, and I’ve been using contractors to get the work done, but I find I’m using the same contractors over and over again. Then sometimes they’re not available when I need them. Should I hire people instead?”

This is when we talk through the pros and cons of having someone on staff vs. using them as a contractor. So let’s have that convo. (BTW, there are very stringent and weird new rules regarding classifications of independent contractors; I’ll discuss those in my next post, so stay tuned!)

Pros of using independent contractors

  1. Flexibility. If you need them 20 hours this month but 40 hours next month — assuming that works for them — you’ve got that flexibility. 
  2. Payroll burden. You’re not on the hook for employee benefits or payroll taxes. Plus, the burden of actually running payroll 24 or 26 times a year can be mitigated because contractors usually bill once a month. 
  3. Skill set (often overlooked pro). Contractors are usually out there working with a variety of sizes and types of clients, so they have a broader breadth of experience and can bring fresh ideas. Not that you can’t get that with employees as well, but it usually comes more naturally with independent contractors. 

Cons of using independent contractors

  1. Availability. Independent contractors, by definition, are working for other people besides you. If their scope expands with another client, they may have less time available for you. Or maybe another client is willing to pay more money. You have less control over scheduling and cost. 
  2. Vision. When you have an employee, they’re signing up for your company’s values and ethos. With a contractor, you’re signing up for theirs. They’re representing their brand, not yours, and their priority is going to be what works best for them. 

Each company and each situation is different. If you’re not sure whether you want a contractor or an employee, call me. We’ll talk. 

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