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Interview Patty

Houston Growth Strategies for Small Business

Five Benefits of Contract Employment

1. - Money Saving. - The hiring process, training and benefits associated with hiring full time

employees can cost well into the thousands of dollars. Many small businesses do not have the resources to go through this process when in need of workers for a critical but finite project. Hiring contract labor also saves money in the form of payroll taxes, as the independent contractor is responsible for paying his own payroll taxes to the IRS.

2. - Specialized or Seasonal Help. - Companies needing a specialized skill set for a finite or indefinite project may not wish to take the time to train new or current employees. They can hire contract laborers already experienced in the necessary competencies. These independent contractors can get the project off and running, supervise permanent employees who possess only the minimal skills necessary, set up project plans and fulfill all project needs in an expedited manner.

3. - Employer Satisfaction. - One of the main benefits, next to cost savings, for hiring contract labor involves the ease of separation. If an independent contractor does not fit in well with the company culture or is not performing to the satisfaction of the employer, the hiring manager can terminate the relationship with little or no paperwork. Terminating a full-time, permanent employee involves cessation of benefits and sometimes an exit interview or other human resources requirements.

4. - Lower Exposure to Legal Action. - Permanent employees, whether full- or part-time, have numerous rights and protections under federal and state laws. Many of these laws do not apply to independent contractors. For example, contract laborers do not have the right to overtime pay, form a labor union, take time off for a sick family member or to spend time with a new baby.

5. - Benefits to Contractors. - Independent contractors make their own hours, decide when to work and who to work for. They do not depend on the success of a single business to produce income and meet their financial responsibilities. According to the Wall Street Journal, independent contractors earn up to 40 percent more per hour than permanent employees. Contractors do not receive benefits from clients; the higher pay is meant to make up for this. Rather than having taxes taken out each pay period, independent contractors pay quarterly taxes, allowing them to hold onto their cash longer.

Source: smallbusiness

Patty Block, President and Founder of The Block Group, established her company to advocate for women-owned businesses, helping them position their companies for strategic growth. Charting the course for impactful, sustainable, profitable businesses, the beacon is control: of your strategic direction, your money, your time, your staffing, and your ability to bring in business. The Block Group brings together the people, resources and ideas that build results.

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