As an SME owner, hiring a contractor to support your permanent staff can be a very beneficial business strategy. Not only is it a faster way to recruit, but it can also help to bring expert insight and experience into your team to assist with new projects or business ventures.
If you’ve never hired a contractor before, it can be a confusing prospect and you might be left wondering what makes it different to recruiting a permanent employee. In this article, we share five key things that you need to know before hiring a contractor to work for your company.
Specific Role Requirements
The first thing you need to consider before you begin the process of hiring a contractor is that you’ll need a specific and detailed outline of what you’re looking for.
With a contract employee there’s no room for training and development, nor hiring someone with the right value alignment even if their skills aren’t ideal. You’ll be hiring them for a specific purpose, to fill a requirement in your company, and you need to be clear about what this is so that you can find the right person for the job.
Sit down and map out the skills and experience that a contractor needs, as well as any other non-negotiable traits. You’ll want to have enough information to be able to write a clear and descriptive job advert, as well as put together a candidate checklist to help with the recruitment process.
Current Recruitment Market
When you’re looking to hire a contract employee, or any employee for that matter, your recruitment process is going to be much more successful if you understand the job market you’re going to be hiring from.
Contractors are in a position where they can often afford to be quite picky with the opportunities that they take. Therefore, you need to make sure that you’re offering an employment package and job experience that is going to be appealing in comparison to others available at the same time.
Do some research into other companies that are hiring contractors and also look at the typical rates and requirements that contract employees in your sector ask for. This way, you can be sure that you’re making job offers that are in line with your competitors and will stand out from other options on the market.
The Onboarding Process
Another key thing to consider before hiring a contractor is your onboarding process. You need to be clear about how you’re going to integrate the new employee into your team and how much of your onboarding approach for permanent candidates you also share with a contractor.
A lot of company onboarding includes getting employees clued up on the organisation’s mission, goals and way of working, which isn’t as important for a temporary employee, especially if they’re just going to be doing their work remotely. But there might be certain platforms or tools that you need to deliver training on, as well as team introductions, which will be important if the contractor is working for you for several months.
Outlining a contractor onboarding process before you hire someone is the best way to ensure that you’re ready to bring in a temporary employee and will be able to get them up to speed as efficiently as possible. It’s important to do this before you begin the hiring process so that the rest of your team can be prepared and you have a reasonable idea of when the new employee will be able to start properly working.
Employment Status
A key piece of employment and tax legislation that you need to understand before hiring a contractor is IR35. IR35 was introduced to target contractors who were working in a certain way to gain tax benefits, and now means that employers have to be very stringent about whether contractors fall inside or outside this legislation.
Essentially, your employment contract will determine whether a contractor is being treated like an employee or an external worker, which then impacts who is responsible for paying tax. Failure to align with IR35 correctly can lead to significant penalties, so it’s an important thing to understand.
You can use tools like an IR35 take home calculator and work with specialist accountancy and HR firms to make sure that you’re working with contractors in line with this legislation. Most contractors will also be familiar with the regulations, and be happy to work with you to determine their status.
Do They Have References?
The final thing to consider before hiring a contractor is whether they have references and are happy to share these with you. Once you get to a stage where you have one or a few potential candidates lined up, something that can tip the scales is the experiences that they’ve had with other businesses.
A contractor with no or negative references is bad news and definitely someone you want to avoid working with. But if a contractor has references on their website, is happy to share the contact details of people they have worked with previously, or came recommended by someone else in your industry, you can feel confident that they’re a good hire.
It might seem like an annoying step to take before hiring someone, but it can save you a lot of hassle by helping to weed out contractors who might have a negative impact on your business.
Summary
Contract employees can be a fantastic asset to your business, particularly if you’re looking for specific insight or experience that can help elevate your offering. It’s important to be fully aware of how hiring a contractor will be different from the traditional recruitment process, but once you’re clued up on the legal requirements and how to find the ideal candidate, you’ll be ready to go.
