Increasingly, businesses are relying on contractors, rather than dedicated employees. There are strengths and weaknesses to this approach, but it is working its way into organizations of all shapes and sizes.
What is it that makes contractors so valuable for businesses, and how should you consider this in your own business decisions?
Contractor Arrangements
There are many ways in which businesses can use contractors, and nearly all of them have the potential to be beneficial. The basic premise of the relationship is a flexible, contractual agreement in which the worker functions somewhat independently according to the terms of that agreement. Unlike regular employees, contractors fall outside the scope of many employment laws, giving employers much more flexibility in how to manage them.
Often, companies use contractors as a kind of substitute for regular employees. This makes it much easier and less expensive to build a solid workforce and enables workers to stay flexible in their own pursuits. It’s also possible for companies to use contractors as a supplemental force. For example, companies can use a fractional CMO to step in and provide insights and/or leadership meant to complement the contributions of an existing CMO. Contractors are also extremely useful for handling any spillover work that regular employees can’t handle.
There are some people who don’t like the idea of businesses using contractors instead of regular employees. That’s partially because employees typically have broader protections under the law, and they often have access to lucrative benefits that contractors can struggle to live without.
Detractors argue it’s a way of giving already powerful businesses even more power over their workers. However, it’s important to recognize that being a contractor has a lot of advantages as well. Not only does it give you more negotiating power in certain instances, but it also allows you to work much more flexibly and take charge of your own productivity. It’s not for everyone, but it can be an exceptional opportunity.
Why is it that contractors are so valuable for businesses?
· Inexpensiveness. Some businesses opt to use contractors as a way to save money. Contractors are typically less expensive than comparable employees, especially when you factor in the costs of benefits. This arrangement is also financially beneficial in part because contractual relationships allow you to hire and use only the workers you truly need – and you can terminate or modify contractor agreements easily if the relationship is no longer mutually beneficial.
· Simplicity. Employment law is complicated and difficult to navigate. Employers still have some obligations and duties to their contractors, but these requirements tend to be easier and simpler to work with. Businesses hoping to save money or reduce headaches are therefore incentivized to work with contractors when possible.
· Flexibility. Another advantage of working with contractors is the total flexibility of this type of relationship. While most businesses use a standard contractor agreement for a variety of roles, it’s possible to customize terms of work with every contractor in your organization. You can also hire and manage exactly the right contractors you need for as long as you need them, with minimal waste, redundancy, and spillover.
· The talent pool. Tapping into the world of contractors also gives you access to a much broader talent pool. As any recruiter can tell you, it’s hard to find the perfect candidate whenever a full-time position opens, and it’s nearly impossible to have a perfect balance of filled positions. Contractors help you close this gap and get access to excellent talent.
· Focused productivity. There are many types of contractors, but most contractors you’d consider hiring specialize in a narrow discipline. Accordingly, they’re often more focused, diligent, and competent in their respective areas.
· Scalability. Businesses interested in scalability also benefit from contractors. Scaling is generally a good thing, but it can be dangerous if not managed properly. Hiring too many people too quickly can bankrupt your business before you benefit from the growth. Hiring contractors can solve this problem, enabling your business to get access to the workers it needs while simultaneously giving it an easy escape route if you need to make cuts in the future.
· Supplementation. Most businesses that use contractors don’t use them exclusively; Instead, their contractors are a supplementary workforce designed to complement and enhance their primary workforce. With this arrangement, you can get the best of both worlds.
Contractors remain an incredibly valuable asset for many business owners, especially when used in the right context and for the right reasons. This arrangement may not work for every business or every worker, but because much of the beauty of these arrangements is derived from their flexibility, they can work in a wide variety of environments.
