Independent contractors have a higher turnover rate than employees. Because they have freedom over who they work with, contractors may leave you for a different project. Additionally, contractors are typically hired for short jobs. With such a short time to work with your company, it’s difficult to cultivate loyalty.
These issues can be addressed in different ways. Consider ways you can help your contractors align with your company’s goals and values. If they buy in to your mission, it helps foster loyalty that goes beyond a contract. Determine the best way to keep lines of communication open. It’s important to have a structure in place — whether you use email, phone, or in-person meetings. Finally, look for ways to create engagement with your independent contractors. This can be created through incentives or programs to help your contractors feel like part of your team.
3. Do I have the correct contracts and paperwork in order to hire an independent contractor?
It’s important to have a written contract that outlines the freelance relationship. This needs to list expected results from the project, fees, and date(s) of completion. Because of laws around intellectual property, contractors own work they create. To have ownership, you must add language in your contract that says the product is a work made for hire.
The contract should also list:
Don’t forget to note the contractor’s business and tax I.D. number. It’s a best practice to create a new contract for each new project. Finally, have both parties sign all contracts.
4. Do I have the structure in place to stay compliant with federal regulations?
Businesses who hire independent contractors are far more likely to be audited. Independent contractors pay their own taxes every quarter. Because this can create irregular payment schedules, the government has specific requirements for independent contractors. If you do not turn in the appropriate tax documents, it can lead to hefty IRS fines.
You must collect and turn in the following documents:
5. Do I have the right tools to effectively manage my independent contractors?
Because of the dynamics of working with contractors, it’s critical to have an effective system in place. Unlike traditional employees, you have less oversight over contractors. You have less control over the specific details of projects and how they are completed. Additionally, they often work on multiple projects. If they choose not to make your project a priority, it becomes even more important to manage their time.
An effective project management system will allow you to optimize work from your contractors. To consistently meet deadlines, you must plan instead of react. When looking for a project management solution, ask if it can:
Having a solution that helps you execute projects successfully will pay for itself. Furthermore, the improved process will help you establish a stronger relationship with your independent contractors.
Streamline Your Process With the Right Tools
If you’re ready to hire a contractor, you can set yourself up for success with the right process.
Remember, an improved project management process isn’t the only way you can create new efficiencies. When onboarding independent contractors, don’t neglect the screening process.
Deltek’s integration with Verified First allows you to quickly screen independent contractors. Through putting them to work faster than your competitors, you gain a built-in advantage. If you’re ready to save time through integrated, effective solutions, fill out the form below.