Short-term workers for short-term projects Show
You don't always have to hire a permanent employee for every role. If your small business needs someone with specific skills for a short-term project, it could make sense to hire a contractor instead. Contractors are not part of your permanent workforce. They aren't your employees. They are one-person businesses who work for organizations for a short period of time. Whether it's for a couple of weeks or a few months, hiring a contractor could help your small business to grow in a more flexible way. But contractors aren't suitable for every role. Here are some important points to consider before you decide whether hiring a contractor is the right move for you. What defines a contractor?A contractor is someone who works for you on a short-term basis, usually on a project. You can find a more detailed description in our other guide about independent contracting. Contractors are sometimes referred to as freelance workers or consultants. These terms can mean slightly different things, though, and legal definitions may vary from country to country. The most important thing to remember is that a contractor is not an employee. Contractors are independent businesses working for you, sometimes on your premises. If you treat them as employees you run the risk of losing money through unnecessary extra taxes. So always follow local, legal guidelines to make sure you get this right. The easiest way to find out if you should hire a contractor is to see why other companies hire them. Here are some of the reasons:
Skills and experience are the big plus points here. Becoming a contractor is a major life decision because it's a step outside the 'safety' of full-time employment. So people who take up contract work are likely to be confident about their skills, with experience to match. When not to hire a contractorContractors aren’t replacements for employees. Both have their place, but there are situations where hiring a contractor could be the wrong decision. When you’re building a teamStability is important for good team dynamics. Having contractors come and go is fine if they're outside your core business, but it can be a big distraction otherwise. When you want to invest for the futureDo you know where your small business is going to be two years from now? You'll want to make sure you have people on board who you can trust to develop the business with you. Hiring contractors for long periods rarely makes good business sense. Contractors can help your business through periods of growth or difficulty, but they don't add value to the core business. Investing in employees could pay better long-term dividends than spending a lot of money on contractors. Use good quality accounting software to test different growth scenarios – with and without contractors. And make sure you talk to your accountant or financial advisor for a clearer picture. When you want to develop key HR assetsEmployees are assets. Like sports teams, it's great if you can find someone with talent and then develop their skills and attitude so they become increasingly valuable. But it can be annoying and expensive to train a contractor to do a task, then watch them leave and take their skills and knowledge elsewhere. What to consider when hiring contractorsHere are some of the practical points you should think about when hiring contractors:
Where do I find the right contractor?The simple answer is: go where they go. There are specialized websites for people seeking and offering contract work. Look at sites such as Upwork and Freelance. Use LinkedIn and other social networks to tell people you're looking to hire a contractor. And talk to friends, family and business acquaintances to see who they might recommend. Get the best out of the contractors you hireSome contractors might have a different attitude to work than your employees. They tend to be more focused on their projects and less team-oriented. This doesn't have to be a problem. In fact it can work to your advantage. As with anyone else who works with you or for you, if you understand and accept their differences you'll be able to get the best out of them. Be sure to keep track of your contractors' hours and how much they're costing you. Use your accounting software to produce reports so you can see whether you're getting value for money. In time you'll discover the right mix of employees and contractors that works for your small business. What are the four 4 factors used to determine whether someone is an independent contractor?The Law Is Clear
Certain factors will define a worker as an independent contractor in every case: not relying on the business as the sole source of income, working at his or her pace as defined by an agreement, being ineligible for employer provided benefits and retaining a degree of control and independence.
How are independent contractors paid in Canada?Ways to pay contractors in Canada. Wire transfers. Great for instantly transferring funds between banks, this is a costly option that many businesses can't afford on a regular basis. ... . Check or money order. ... . Bank transfer. ... . Digital payments.. |