Hire More Employees or Contract Out?

The economy is starting to turn around, and if things continue in a positive vein as I think they will, your company may soon be growing. A growing company has many decisions to make, including:  do we hire full-time staff as employees, or do we add independent contractors?

The benefits of hiring independent contractors can include lower overhead in the form of health insurance and benefits. But does lower overhead outweigh the returns on investing in dedicated employees who may be loyal to the company, grow in ability with it, and eventually be more self-sufficient and reliable?  After all, that independent contractor may be spending more mindshare and effort building his or her own business, versus your business — on your dime!

And is overhead really such a large issue today when tasks can be seamlessly outsourced to professional employer organizations?

Aside from that, there are some complex issues.  No matter what you call him or her, is the person really an employee and not an independent contractor, in the eyes of the government?  A small business owner must fully understand worker classification and compliance, and many do not – one in three U.S. businesses fail a worker classification audit.

This Thursday a complimentary webinar will answer these questions and many more, including your questions:

  • What is the most cost-effective way to build a team of contractors and employees, and how can they interact productively?
  • How the does IRS classify independent contractors vs employees for tax purposes?
  • Which resources, such as PEOs, HR consultants, and other providers, are best-suited to aid small businesses in managing the complexities of HR?
  • Can improperly classifying your staff hurt you in the long run?
  • How can you implement the 20 Factors Test or the ABC test?  (And do you even know what these tests are?)

This webinar features a panel of experts, including a representative from the U.S. Department of Labor, Wage and Hour Division.

It is free – just be sure to register your spot in advance so you don’t miss out. What you learn could save your company on costly penalties:

Time:   2 pm ET/11 am PT
Date:  Thursday, April 26, 2012
Registration Link:  http://myventurepad.com/employee-contractor

Save your company from serious penalties — register now.


Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.

4 Reactions
  1. Excellent, I’ll be sure to check that out. I think every business has to grapple with the contractors vs. employees question at some point.

  2. Anita – very timely. In my experience many employers do not understand the legal context for the 20 factors. Massachusetts employers, in addition to IRS rule making, have a more restrictive law regarding M.G.L. c. 149, s. 148B, a.k.a. the Massachusetts Independent Contractor Law. Look forward to the seminar. Thanks.

  3. Should be a great webinar because contractors represent a fantastic way to fill the gaps between hires as you grow.

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