The number of people who do work on a contractual basis is increasing every year. According to a report made by the non-profit organization Freelancer’s Union, employer-independent workers form one-third of the total workforce in the US. These people either work for companies on a per-project capacity, or on their own as freelancers.
But before we delve deeper into the reasons for hiring contractual employees that business should know about, a clear delineation of terms is in order.
An employee is a person hired by a company (either on a full-time or part-time basis) who is subject to federal and state employment laws. These laws contain stipulations regarding pay, taxes, benefits, and termination procedures that should be strictly followed. Most of the time, employees are allowed to work with only one employer at a time and are completely barred from working for competitors.
A contractor or freelancer, on the other hand, is a person who works for business on a finite, project-by-project basis. The term “contractual employee” is actually kind of a misnomer since state and federal laws regarding employees do not apply to this kind of working arrangement. The contractor is considered as a business on his or her right; he or she does not have an employer-employee relationship with a business, but rather, a client-provider one.
Reasons for hiring contractual employees – top benefits
One of the top reasons for hiring contractual employees is the fact that it can be cheaper and faster for businesses to hire experienced contractors rather than recruit, hire, and train employees from the ground up. The business can also save up on costs for health insurance, benefits, payroll costs and all of the other expenses that they would otherwise need to provide to traditional employees.
Other top benefits include:
1. Being able to adjust quickly and easily to fluctuations in the workload
If there’s more work to be done, businesses can easily take on more contractors to handle the increased load (especially during seasonal and peak periods, or whenever there’s a special project that needs to be rushed). These contractors can also cover for sudden employee absences or whenever there’s a shortage in the workforce.
2. Being able to work with more flexibility
Contractors often have flexible work arrangements with the company they’re rendering service for. They are not required to be in the office or work under supervision. The important thing is that the deliverables that are agreed upon beforehand are submitted on time.