The hiring climate is changing. More workers are opting for the flexible lifestyle that “gig” (contract) work offers. At the same time, employers are struggling to find talent to fill permanent positions on their teams. It might seem like a full-time worker is the most cost effective solution for your hiring needs. However, when it comes to consulting work, you might want to consider hopping on that Gig Economy bandwagon.
What does a $100,000 employee actually cost? Let’s think about it:
- Paid leave
- Social Security and Medicare taxes
- State unemployment taxes
- Workers’ compensation insurance
- Office space
On average, those pluses all add up to another 40 percent or, in the above scenario, a $140,000 annual cost. Why spend $140,000 when you could likely spend half that by hiring a Gig Worker?
Gig Worker Explained
Gig Workers (also called consultants and contract employees) perform tasks for your company, but do not actually work for you. In fact, they may even be working for several companies at once. They typically work on a temporary basis, meaning that you are not responsible for paying for health benefits or bonuses. Sometimes, you won’t eve have to pay for their office space. These workers are at-will, and therefore may be hired or let go quickly, allowing for more flexibility on your end. They use their own equipment and work on their own time to provide capacity for your company as needed.
It’s important to evaluate whether consultants will work in your company’s culture. They will most likely spend little time physically present at the office. Therefore, it may require a bit of extra communication to keep them in the loop and functioning as a part of the team. It’s also extremely important to understand the regulations that apply to treating workers as contractors versus employees. The IRS’ website has very good resources on this particular issue. When in doubt, your counsel can ensure that you’re compliant.
Why consider hiring a Gig Worker?
You are not responsible for paying a contractor’s benefits, paid leave, Social Security and Medicare, FUTA and state unemployment compensation insurance, workers’ compensation, office space, or equipment—expenses that can increase payroll costs by as much as 40 percent.
Contractors can be brought in with one phone call and they can be let go when you no longer need them. This is especially helpful for special projects and in seasonal environments.
Contractors come pre-trained, making them immediately more productive. Plus, you avoid the hassle and expense of recruiting, training, and onboarding.
Experience and Expertise
When you need someone with specific expertise and significant experience, but can’t afford to hire that person full-time, a contractor is a great option. You don’t need to expend resources to attract high-level candidates, and you pay for the experience you need, only while you need it.
Contractors generally cannot bring a wrongful termination charge against your company. When you need to let them go, you avoid the drawn-out termination process that typically accompanies firing an employee.
Need help finding the right person? We can help! We specialize in connecting companies just like yours with the top consultants in the business.