Hiring contract employees is on the rise among corporations. So does this mean the days of the golden handshake (or the new era of elbow bumps), class A office space and water cooler gossip are 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 State of Self-Employed survey by Intuit’s Quickbooks showed that pre-pandemic, 28.2 percent of people were self-employed. Out of that number, nearly 14 percent said that their primary job was independent contractor work.
The big question is: why is hiring contract employees so popular? You might be surprised by 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. Additionally, some states, such as Washington State, have instituted mandatory FMLA, paid sick leave and long-term care. 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, in the event of layoffs, any legal compensation is usually not required for contractors. Additionally, employers don’t need to provide extensive equipment, such as computers, printers, cell phones, etc., since once the project is complete, the contract is terminated.
- Specific Skillsets – It’s common knowledge that “bringing someone in” for a project will be trained specifically for a particular project, eliminating 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 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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