What are the benefits of hiring Independent Contractors?

The way companies work with talent is changing fast. Technology is now allowing us to work with remote talent , which has opened up newer modes of employment.  Many companies now see the benefits of hiring independent contractors to build their teams. 

Independent contractors can be a great way to get the skills and expertise you need without the additional costs and operational and compliance challenges of hiring full-time employees. Let’s briefly understand the role of independent contractors and the key reasons why they are becoming necessary for companies looking to grow their remote teams.

Who are Independent Contractors? 

Independent contractors are individuals or entities that provide services to another entity under terms specified in a contract or within a verbal agreement. Unlike employees, they do not work regularly for an employer but work as required, often for multiple clients. 

Key characteristics that define independent contractors include:

1. Control and Autonomy: Various labor regulations allow contractors to decide how, where, and when they carry out the services they are hired for. Employers or clients cannot impose conditions on these aspects. They cannot exert the level of control and supervision as they would over permanent employees.
2. Business Structure and Payment: Independent contractors frequently operate under a business name. They may have their employees. They might also possess a business identification number (such as an EIN in the United States). They are responsible for managing their business operations, including maintaining a business checking account, calculating and paying taxes, etc. 
3. Tools and Equipment: Businesses are not obligated to provide contractors with the tools and equipment. Independent contractors must own the tools, devices, and accessories required to deliver their services. 
4. Duration of Relationship: The relationship between a contractor and a client is typically limited to the time of a project or a predetermined period defined in the contract.
5. Multiple Clients: Independent contractors often work with more than one client or company at a time and do not have an exclusive commitment to a single employer.

Benefits of Hiring Independent Contractors 

1. Flexibility and Scalability

 Need a coding expert for a sprint? Bring in an independent contractor who can start from the get-go. Launching a global campaign? Tap into a network of multilingual content creators. This agility lets you:

• Scale instantly: Adapt to project demands effortlessly, without the bloat of permanent hires.
• Optimize talent: Match the perfect skillset to every project without long-term commitments.

Think of independent contractors as your on-demand talent team, ready to be deployed when and where you need them most. No rigid employment regulations. Just a dynamic team that bends and flexes with your business needs. 

2. Cost Savings

Expanding your team shouldn't mean exploding your budget. Hire independent contractors and forget pricey office setups, tangled payroll taxes, and hefty benefits packages. With independent contractors, you tap into a global talent pool without the financial baggage

• Ditch the overhead: No desks, equipment, or utilities to manage. You simply pay for the delivered work.
• Simplify taxes: Skip payroll complexities and focus on your core business.
• Avoid benefits costs: Say goodbye to health insurance, retirement plans, and vacation pay.
• Scale smart: Add talent exactly when and where you need it without fixed headcount burdens.

Moreover, if you’re hiring independent contractors from low-cost economies, you benefit from the following - 

• Lower wages for labor-intensive tasks: Wages in low-cost economies are much lower than in developed countries, which leads to cost savings for employers 
• Tax advantages: Some countries offer tax breaks to companies that outsource work, which leads to tax savings for employers. 

Think of Independent Contractors (ICs) as an economical way to expand your business globally. Utilize their skills, help your team thrive, and maintain a budget-friendly approach.

3. Tap into a Global Talent Pool

The biggest benefit of hiring independent contractors is that you can recruit the best, wherever they are, and unlock these game-changing benefits:

• Global reach: Access a vast pool of skills and expertise beyond your local borders.
• Diverse perspectives: Inject fresh ideas and unique viewpoints into your company culture.
• 24/7 flexibility: Leverage talent across time zones for extended project coverage

Bringing cross-cultural individuals together helps your team with fresh ideas, challenges assumptions, and ignites revolutionary approaches to old problems. Your in-house team gets inspired, thinking outside the box and pushing the boundaries of innovation.

4. Faster market entry 

Traditional hiring processes can be laborious and time-consuming, especially if you’re entering a new market. Financial and operational risks of setting up a new team and office space, and navigating local regulations often slow down your journey to market. 

With independent contractors, businesses can test the waters with minimal upfront investment. If the market is promising, you can scale your operations and in-house team. This agility translates to a faster launchpad for your projects, giving you a crucial edge in today's competitive market.

• Leverage local market expertise: Put the local knowledge and experience of independent contractors to good use to navigate cultural nuances, regulatory hurdles, and specific market dynamics. This can help you avoid costly mistakes and increase your chances of success.
• Target specific needs: Rather than hiring generalists or full-time employees for specific market entry projects, assembling a team with exact skills and expertise is easy. 
• Validate market and gather feedback: Your contractors’ performance in a new market can provide insights into product-market fit, customer preferences, and potential challenges. This data can guide strategic decisions and help you navigate a full-scale market entry with a permanent team

Want to onboard contractors faster?

Gloroots streamlines the entire process of hiring and onboarding independent contractors with its exclusive 6-step contract generation, allowing you to assemble specialized teams in less time. ️The platform also offers a single dashboard view to check contractors’ onboarding status to manage remote teams better. 

5. Risk Mitigation

Traditional hiring comes with a stack of paperwork and legal complexities. With Independent Contractors, you navigate a lighter legal landscape, mitigating several key risks:

• Employee benefits: No need to manage health insurance, retirement plans, or unemployment benefits – independent contractors handle their own work-related liabilities 
• Legal liabilities: By not being full-time employees, ICs bring reduced potential for lawsuits and legal entanglements related to employment practices.

Note: Incorrectly categorizing independent contractors as employees or vice versa is illegal. It can result in loss of public tax revenue and reputational damage. Gloroots offers expert guidance and AI-powered tools to ensure you comply with contractor regulations, avoiding costly misclassification pitfalls. 

Want to understand if you’re unknowingly misclassifying independent contractors? Find out with our Employee Misclassification Risk Calculator

6. Focus on Core Competencies

Forget juggling non-essential tasks that drain your in-house talent. Independent contractors can tackle tasks that do not deliver direct or significant business value and liberate your team to deep-dive into your core business competencies.

Here's how ICs help your team regain laser focus:

• Offload non-core tasks: Marketing campaigns, data analysis, web development – Independent Contractors can handle it all, freeing your team from distractions and allowing them to concentrate on strategic initiatives.
• Boost internal efficiency: With key tasks streamlined, your in-house team can operate at peak performance, maximizing their expertise and driving greater value.
• Optimize resource allocation: By adjusting contractor engagement based on project needs and seasonal demand, you can hire high-skilled talent on-demand and avoid the prolonged time-to-hire involved with employing permanent employees. 

The result? A leaner, more agile organization where your most valuable asset – your in-house talent – is laser-focused on the activities that truly move the needle for your business.

7.  Easy Termination 

Independent contractors typically work under contracts that specify the project scope, deliverables, and termination clauses. These clauses often outline conditions under which the contract can be terminated, either after the defined responsibilities are fulfilled or without notice if the work isn’t satisfactory. These contractual agreements provide clarity for both parties and a potentially quicker path for termination than the complex legalities in terminating full-time employees. 

Employers generally don't have the same legal obligations towards independent contractors compared to full-time employees. If the contract is terminated, they're not responsible for severance pay, unemployment benefits, or continued health insurance coverage.

Simplify contractor onboarding and management with Gloroots

At Gloroots, we understand the power of a global remote workforce empowered by independent contractors. Our comprehensive platform simplifies and streamlines every aspect of hiring and managing independent contractors, from talent sourcing and contract generation to compliance and payroll solutions. 

We make it easier than ever to leverage the vast potential of independent professionals, helping you build a diverse, agile, and future-proofed team that propels your business to new heights. Partner with Gloroots and unlock the true potential of independent contractors.