Small businesses have a lot of decisions to make with regard to spurring their growth. Should they expand their operating hours? How should they price their products and services? Should they try to tap a new market? Making the right decisions early on will make quite a difference in the long run.
If you’re a small business owner, one area of particular importance is the way you approach employment decisions. In particular, how do you take advantage of the growing number of contracted workers and freelance jobs? Read on to learn why it’s worthwhile for your business to lean on freelancers and how they’ll make an impact on your organization:
1. Lower Overhead Costs
Perhaps the most common reason businesses hire contractors is because it’s a cost-effective labor option. Businesses can save up to 30% on employee costs by hiring independent contractors. This is primarily due to the fact that businesses are not required to pay for unemployment insurance, payroll taxes, or benefits for contractors.
Hiring full-time employees is also an expensive and time-consuming process. You have to advertise, field applications, sift through candidates, and carry out extensive training to accommodate them to your business model. Contracted workers know their trade and have the knowledge and tools necessary to do their job as soon as they’re given an assignment.
It’s important to note that hourly wages and salaries for contracted workers tend to be higher than for full-time employees. Just remember that, in the long run, you’ll be saving more money even if that first invoice looks a little larger than you’d hoped.
2. Specialized Skill Sets
Some of the jobs your small business needs to have done are highly specialized. Your current team may be unable to perform a particular task, such as a yearly audit. However, the low frequency of the job will dissuade you from hiring a new person to do it. A contractor can save the day.
An independent contractor works on discrete tasks. Let’s say your business wants to get a website launched. Simply hire a freelancer in that field, and they’ll set up your site and be on their way. You’ll get the job done by a well-qualified individual without any logistical headaches. This will come in handy when no one on your current team has experience in website creation.
Successful contractors have the proper training (and, where necessary, certifications) to engage in their trade. Getting existing employees up to similar speed could be quite the undertaking. Knowing that a short-term hire already has the required qualifications, without your needing to foot the bill, is a reassuring thought.
3. Minimal Supervision Required
As an entrepreneur managing your small business, you wear many hats and have your attention pulled in every direction. A team that can work autonomously will free up a lot of your time, as employees solve problems and put out fires on their own. Contracted workers take this one step further. Their ability to work with minimal or no supervision is a given, meaning one less headache for you.
Even the best of employees will have questions and concerns that come up during the business day. Contracted workers, in contrast, have one job to do, and they focus on it until it’s done. If everything goes well, you might not see or hear from them for the duration of a project. That’s no small thing when you’re extraordinarily busy and just want to see results.
4. Expanded Talent Pool
Depending on the nature of the job, you can hire contractors from all over the world. Anything that can be done remotely can be contracted out. You can work with a web developer from India, a graphic designer from Mexico, or an auditor from a U.S. state other than your own. This greatly enhances your talent pool, giving you more options than what’s available locally.
In order to capitalize on global talent, your communication skills must be top-notch. You need to be able to screen freelance candidates effectively over email, phone, or videoconference to ensure you’re hiring the best ones. When dealing with differing time zones, take into account when deadlines should be set. Time differences will also influence which channels you’ll use to communicate most effectively with the contractors you do use.
5. Trial Run for Employment
If you’re looking to expand your full-time team but don’t want to scale too quickly, start with contracted workers. Assigning projects to a freelancer works as a sort of test run that could lead to full-time employment in the future. If a candidate doesn’t pan out or the position falls through, the short-term commitment of contracted work does no harm to either party.
Not that a contracted worker can’t be with your organization in that capacity over the long run. Many freelance workers prefer to stay that way. If you have a favorite contractor, send them as many projects as possible. Keeping them close makes them a valuable asset for your company, and they’ll be happy to have the steady income.
6. Increased Efficiency
Contractors have greater incentive to be efficient. Since they often get paid by the job, they need to complete one task as quickly as possible in order to move on to the next. This doesn’t come at a loss of quality, though, as poor performance means no return calls from companies.
If you need to get a lot done quickly, especially in the earlier stages of your business, look toward contracted work as a solution. Of course there are things a contractor can’t do, like run a cash register, but less frequent tasks will be well handled.
7. Reduced Risk of Lawsuits
One lawsuit can spell the end of your business. Employer-employee relationships are subject to myriad laws and regulations, which can be tricky to navigate. This is especially true if you’re a small business owner without a lot of legal knowledge.
While you should always seek to obey the law, there’s comfort in knowing there’s less risk involved when dealing with freelance workers. Contractors are in charge of their own taxes, manage their own time, and oversee their own workplaces. These are just a few of the hurdles that entrepreneurs can avoid when using freelancers to help get their small business off the ground.
Ready to get to work? Begin identifying tasks you can divvy up among contracted workers as you get your new business process started. Once you get the hang of the new logistics, you might never go back to the old way of doing things.