Remote Work

Benefits of Hiring Independent Contractors

Back to blog
July 21, 2020
Contents
Hiring independent contractors on Deel
Hiring full-time employees on Deel
How do payments happen on Deel?
Deel is free for contractors
Deel pricing for companies
See Deel in action
You pay for Deel now, yes?
Try Deel
Back to blog

Are you considering hiring independent contractors? Are you already working with them?

As technology changes, enabling an ever-increasing number of people to work remotely, the use of independent contractors is growing. Although there are quite a few benefits, deciding to work with independent contractors should be carefully considered. We will talk about this in one of our next articles. For now, let's take a look at the primary benefits of hiring independent contractors.

Cost per employee savings

One of the main reasons companies choose to hire independent contractors over employees is the cost that is saved based on the working relationship. Employers are not responsible for covering traditional benefits, such as health insurance, unemployment insurance, and others. On top of that, independent contractors are usually the ones responsible for taxes.

Reduced office and supplies costs

If you are working with independent contractors, they most likely won't need an office as they work off-site, especially when working remotely. This is a huge money-saver that leaves you with additional finances that can be put elsewhere. Besides that, independent contractors should work with their own equipment and usually do not require any resources to perform work.

Access to global talent unlocked

We already touched upon independent contractors working remotely. Since you are not tied to one specific location, you can source talent from wherever you need. This gives you a bigger pool to pick from, makes it relatively easy to promote the job posting, and ultimately reduces recruitment costs.

Staffing flexibility

Independent contractors can be brought in for a specific project or on needs-basis. Once the agreed period of time or a project is completed, you can asses if this person is a good fit and can continue the working relationship. If not, you simply do not renew the agreement for the next project. This is also an excellent option for companies that have a fluctuating workload.

Little or no training expenses

Since you are sourcing your independent contractors from a pool of people globally, you will pick the person with the skill-set that you need specifically for the type of work. Contractors are usually specialized and do not require any training to fulfill their tasks.

Higher level of efficiency

When you are hiring an employee, it is expected to be a lag between the time they join and when they perform at their full capacity. Independent contractors, as we already mentioned, often have specialized skills and allow the employer to get more accomplished faster.

Ending the working relationship is easier

When you work with an independent contractor, it's much easier to end a working relationship. In some countries like France, for example, firing an employee is very tough. Since contractors are usually hired to work on a specific task or project, once their work is done, they will probably move on to other clients. This gives you a chance to asses their work and decide whether you want to call them back for future projects.

Although there are many benefits to hiring independent contractors, you need to be well aware of misclassification risks. The governments are paying a lot of attention to this matter. They are introducing more strict rules and local labor laws to fight potential tax avoidance (AB5 in the USA, IR35 in the UK, and many more). If you are a US company, take into account this 20-Factor test that can guide you through the classification process. For more general information, take a look at this guide to hiring independent contractors.

Hiring remotely?

Legally hire anyone, anywhere in the world, run payroll in 100+ currencies.

Deel's partnered with 100+ labor law experts so you can pick from the library of localized contract templates and legally onboard your international teammate in minutes.

From onboarding to payroll, Deel team has you covered.