Hiring contract employees is on the rise among corporations. Does this mean the days of the golden handshake, class A office space and water cooler gossip a thing of the past? Not quite, and there’s no need to worry about losing your cozy corner office just yet.
Even though full-time still reigns supreme among America’s employed, the US Bureau of Labor Statistics reported in May 2017 that of the four alternate work arrangements, independent contract employment accounts for a leading 6.7 percent for total employment. On-call workers were a distant 1.7 percent, temp agencies were 0.9 percent and contract firms had a total 0.6 percent.
The big question is: why is hiring contract employees so popular? You might be surprised with the many reasons and just as many of the benefits. Here are four of them:
- Cost Savings – According to Nolo, having a full-time employee increases payroll expenses. Benefits, dedicated office space, plus contributions to social security, unemployment compensation insurance, etc., can inflate a business’s payroll by approximately 20 to 30 percent. At the same time, recruiting a contract employee eliminates most – if not all – of these expenses.
- Flexibility – Nolo also states that many businesses experience fluctuating workflow levels throughout the year. Rather than pay a full-time salary (or salaries) – even during less busy times – the cost of a contractor is discontinued when the project is completed. Additionally, any legal compensation in the event of layoffs is – in most cases – usually not required for contractors.
- Specific Skillsets – It’s common knowledge that “bringing someone in” for a project will be trained specifically for a particular project. This eliminates the time, effort and costs of training. Plus, having “a hired gun” for a specific project allows existing full-time employees to concentrate on other business growth.
- Large Projects – In a recent article from The Balance Small Business, hiring an independent contractor is ideal for when a large project is not part of a core business, which in turn, allows the opportunity for a company to generate revenue from another business sector. Additionally, the project can be executed by a professional with little supervision. Also, as contract employment is sometimes only for short periods, the project will be completed and scheduled in an allotted set period of time.
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