Introduction
Organizations often need to hire employees to perform project work within the outlined deadline. Employers can turn to part-time employees or independent contract workers if such a need arises. The choice of an independent contractor is advantageous for the organization since this type of cooperation helps the employer minimize material and time costs, simplify administration processes, and increase business efficiency.
The Differences Between Independent Contractors and Part-Time Hires
Independent contractors and part-time workers have different terms of employment, responsibilities, legal requirements, and tax implications. Contract workers perform their work obligations separately from the company that provides them. These workers are often called freelancers and can work with several organizations simultaneously.
Contract workers do not work permanently in the company; they are contracted as needed. Freelancers pay self-employment taxes on Form 1099-NEC, unlike part-time employees who pay taxes on Form W-2 (Fishman, 2020). A contract worker’s salary depends on the project type and is paid after the services are rendered. A contract worker is more profitable financially for the company in the short-term planning.
Part-time employees are usually those who work less than 30 hours a week. Such employees can be employed flexibly, and wages will be accrued based on hours worked. Benefits for such employees vary, with some states requiring vacation, sick pay, and health insurance coverage (Lester et al., 2021). Formally, part-time workers are also part of the company, as are full-time workers. Unlike contract workers, part-timers are more committed to the company, but at the same time, they require more costs from the employer.
Arguments for Hiring Contract Employees
Cost Reduction
The most crucial benefit of hiring a contract worker instead of a part-timer for a project is the lower cost to the employer. In this case, the organization will not have to pay taxes on wages, insurance, and additional bonuses (Fishman, 2020). The self-employed worker pays taxes and fixes the necessary personal expenses. However, such a worker may request a large payment for their services due to the need to pay insurance and tax fees on their own.
Remote Collaboration
Independent contractors predominantly work remotely to be able to collaborate with multiple companies. The remote work format has proven to be effective during the COVID-19 pandemic (Wang et al., 2021). For the employer, there are many advantages in such an organization of activity.
First, there is no need to equip and finance an employee’s place in the office. It is unnecessary to consider the time of work travel, finance a uniform, or think about lunches. A remote contract worker independently assumes the obligation to organize amenities during the working day.
Professionalism
When hiring independent contractors, an employer can expect high professionalism. Freelancers often have significant experience in their field and have solved cases in their resumes. The employer may receive feedback on the candidate’s professionalism from previous companies with which the contractor has worked. Part-timers may not have as much experience, and may also be looking for part-time employment opportunities due to reasons that will not allow much time to work (Tashchian et al., 2022). While working on different projects under strict deadlines, freelancers learn effective time management, which also indicates professionalism.
Efficiency
An essential advantage of working with independent contractors is the efficiency and reduced delays. Since hiring freelancers, the company does not require their services when it does not require their duties. At the same time, the employer selects a contractor for specific goals and objectives, based on the candidate’s experience and professionalism.
The employer does not spend time adapting the contractor to work and immersing in the conditions of the company (Blaising et al., 2021). The employer selects a person who will perform a certain amount of work within a specific time frame. This approach is highly efficient and does not involve breaking deadlines. The low amount of time spent by a freelancer on their duties also has a positive effect on the profitability of the business and its willingness to enter into new projects.
Simplified Dismissal
With full employment, the employer is responsible not only for the period of work, but also for the dismissal process. When hiring independent contract workers, the Human Resources department will not play a key role in the termination process (Samimi & Sydow, 2021). An agreement with a contract worker implies specific work and a time frame to complete.
When concluding such an agreement, the employer can terminate it if the other party does not meet the conditions. The worker is aware of being collaborated with for a specific short period, and business relations in this case are already strictly defined. If part-time employees are hired for the project, terminating the employment contract is much longer and more difficult.
No Need for Training
Independent contract workers usually do not require additional training to begin their direct job duties, as they are chosen based on their qualifications. Typically, such workers prove their competence based on evidence of training and the inclusion of previous partners in the summary of successful projects. When hiring a part-time employee, it is likely that additional training or getting used to the working conditions will be required (Tashchian et al., 2022). The absence of material and time costs for training is an advantage for independent workers.
Minimum Control
When collaborating with an independent contract worker, the employer requires minimal supervision of activities. An employee and an independent contractor can perform their tasks equally effectively, but in the case of a part-time worker, the administrative burden on the employer increases (Samimi & Sydow, 2021). In the case of an independent worker, the employer is not required to micromanage, as the company is not interested in exactly how the work will be done if it is effectively completed on time. The low need for control allows employers to allocate their time and resources efficiently.
Conclusion
When looking for an employee to perform project tasks, it is more efficient for an employer to turn to an independent contract worker. This choice will allow the organization to allocate material and time resources more efficiently. The contract worker does not require additional costs, and the choice of the candidate is based on the required competencies. Collaborating with a freelancer in administrative terms is beneficial, since this type of cooperation does not provide for additional tax payments and reduces the management burden.
References
Blaising, A., Kotturi, Y., Kulkarni, C., & Dabbish, L. (2021). Making it work, or not: A longitudinal study of career trajectories among online freelancers. Proceedings of the ACM on Human-Computer Interaction, 4(3), 1-29. Web.
Fishman, S. (2020). Consultant & independent contractor agreements. Nolo.
Lester, G. V., Brock Baskin, M. E., & Clinton, M. S. (2021). Employer-sponsored benefits in the United States: The past, present, and future. Compensation & Benefits Review, 53(1), 24-42. Web.
Samimi, E., & Sydow, J. (2021). Human resource management in project-based organizations: revisiting the permanency assumption. The International Journal of Human Resource Management, 32(1), 49-83. Web.
Tashchian, A., Kalamas Hedden, M., & Forrester, W. R. (2022). How faculty status impacts student evaluations of teaching: A study of full-versus part-time marketing faculty. Journal of Marketing Education, 44(1), 113-126. Web.
Wang, B., Liu, Y., Qian, J., & Parker, S. K. (2021). Achieving effective remote working during the COVID‐19 pandemic: A work design perspective. Applied Psychology, 70(1), 16-59. Web.