Today’s blog post is brought to you by Courtney Rosenfeld of gigspark.biz, where she gives advice to those pursuing work in the gig economy. Hiring out work can be a great benefit to those of us with a handmade business; we simply can’t do it all, and when that happens, it’s best to hire an expert. Courtney breaks it down for us here—enjoy!
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There were 16.5 million contingent and alternative workers in the U.S. in 2018. As the freelance and gig economies grow, that number is only expected to rise. For business owners looking to solve temporary labor needs and keep costs low in order to help them meet sales and marketing goals, hiring contingent workers is an attractive option. Craft e-Revolution offers the following information on what business owners should know before making the leap.
What are contingent workers?
Contingent workers are freelancers, independent contractors, temporary workers, consultants, and other hires outside of a company. Contingent workers aren’t considered employees, which means they receive payments instead of salaries and aren’t eligible for benefits. Contingent workers are also responsible for their own payroll taxes.
Advantages of contingent workers
HR leaders say they hire contingent workers in part to save money. Without benefits or payroll taxes to pay, companies can hire contingent workers at higher hourly rates than their permanent staff and still save.
Contingent workers are also popular for short-term labor needs. Whether it’s to staff a big event or execute a digital project, businesses can use contingent employees to temporarily increase their staff without onboarding employees.
6 times to hire contingent workers
These are examples of times a business might choose to hire contingent workers instead of permanent employees:
Starting a new business
If you have just started a small business and don’t need full-time employees, payroll may not be worth the additional investment. This is especially true if you’ve opted for a Colorado LLC registration, opting for pass-through taxation. Wages for contract workers and freelance workers can simply be written off as business expenses, keeping it simple.
Branding and marketing
A business’s brand plays a big role in its success. Whether a business has a big marketing budget or a minuscule one, branding and marketing freelancers can help them achieve their goals.
Staffing an event
Staffing trade show booths and greeting guests isn’t the best use of valuable employee time. Rather than overpay salaried workers to staff events, businesses can hire temporary workers to manage security, catering, registration, and other logistics.
Outsourcing bookkeeping
At some point, keying accounting data becomes a poor use of a business owner’s time. If they can’t yet justify an in-house bookkeeper, a virtual bookkeeping service is an excellent stopgap.
Improving business operations
When operational snags stop a business from growing, hiring a consultant can help you take a step back and find new, innovative ways to grow your business.
Implementing cybersecurity
Most small businesses don’t have a cybersecurity expert on staff, but they still have valuable data to protect. A cybersecurity consultant can secure a business’s IT systems to reduce the risk of a breach.
Hiring contingent workers for high-tech jobs
One of the top reasons companies hire contingent workers is because it’s a great way to access highly skilled talent without bringing on an expensive permanent employee.
One example of a project where a business benefits from contingent workers is web development. Rather than hiring a permanent web developer only to run out of work when the site is complete, businesses can hire freelance developers. And since web developers know their skills are in-demand, there are countless freelance web development experts to choose from. That makes it possible for businesses to find the right talent at the right price; businesses in need of complex redesigns can find developers with advanced skills, while businesses looking to update their site’s front-end can hire a CSS developer.
Where to find contingent workers
As the contingent workforce has grown, so have websites dedicated to finding and hiring them. Freelance job boards, gig economy apps, and even LinkedIn are resources for finding contingent workers. When hiring through these websites, you’ll most often be working with independent contractors. Businesses must comply with certain rules in order to classify a worker as an independent contractor.
Agencies are another way businesses can find contingent workers. These include staffing agencies, consulting firms, and outsourcing agencies that provide business services like virtual assisting, bookkeeping, or customer service. Usually when working with an agency, the contingent worker is an employee of the agency. As such, you’ll submit payments to the agency which then pays the worker.
If you find yourself in the scenario of needing to hire but not having enough in the budget, particularly if your business took a hit from the pandemic, take heart. Through government-backed or private loan programs, you can quickly access the funds you need to hire the right contract workers for your business. Several companies are also offering grants to small businesses affected by COVID-19.
Contingent workers are a great resource for businesses, especially when it comes to highly skilled and short-term jobs. However, while contingent workers are ideal for many positions, they’re not right for every job. Before hiring contingent workers, businesses should consider assignment length, budget, and tax rules to determine if a contingent worker is the right fit.