Employers need to understand the pros and cons of hiring independent contractors
I started a company at age 25 as the sole employee, developing territories and adding staff as I could. I remember commenting to one of the investors in the company that my job was much easier when I was doing it all myself. He said, “Welcome to management.” He was right.
As a business owner or manager, you are likely supervising employees — and that’s no easy task. I often say that an employee’s personal life is called “personal” for a reason, but that’s not reality in most situations. What is reality is that if an employee’s personal life is not in order, his or her work life likely won’t be either. Some employers choose to hire independent contractors to avoid this kind of drama. They pay for performance, and that’s it. If set up properly, this relationship can be beneficial for both the employer and the contractor, but both sides need to understand the implications and risks involved. The contractor must be self-disciplined enough and manage his or her time very well. The employer must understand that he or she will lose a certain amount of control with a contractor and must be prepared to deal with that. Some employers only see the benefits of not paying overtime, health insurance, unemployment and other business costs, but they must follow the laws closely or risk serious and costly litigation.
We have used both independent contractors and employees in our company, depending on the situation, the job, the person and how the laws were interpreted at the time. It is a pendulum that can swing back and forth, and employers need to be continually educated on the pros and cons.
In this month’s cover story, we interview local business owners and managers, as well as industry experts, to provide you with information to help you decide which is best for your company. As always, I hope that you find this to be a valuable resource for your business.
Thanks for reading.
Editor and Publisher
Iowa Business Journals