In Part 1 of this series, we looked at the differences between independent contractors vs employees. . In Part 2, we determine which hire is best for you.

Let’s review.

What’s an independent contractor again?

An  independent contractor is a worker who:
• Carries their insurance.
• Provides their tools and equipment.
• Pays their expenses.
• Sets their schedule.
• Hires their help or subcontracts work out to others.

So, why hire an independent contractor?


According to the U.S. Small Business Administration, it typically costs 1.25 to 1.4 times a worker’s base salary to hire an employee. That means the actual cost for an employee making $50,000 a year could be as much as $70,000.
That’s a lot of cash.

So, what are these hidden costs?


Hiring an employee means you pay:
• FICA (Social Security and Medicare).
• FUTA (Federal Unemployment Tax).
• SUTA (State Unemployment Tax).
• Any additional state and local taxes.

In addition, you may also pay:
• Health, dental, and vision insurance.
• Retirement benefits.
• Vacation and sick time.
• Medical and family leave.
• Workers’ compensation insurance.
• Overtime.

And that’s not all. According to SHRM (Society for Human Resource Management), it costs $4129 just to recruit, hire, and train a new employee.

But you don’t have to pay any of these things to hire an independent contractor.

Benefits of Hiring an Independent Contractor

Contractors are already experts in the services you need—which means you don’t have to train them. Plus, you don’t have to withhold or pay any taxes on payments to contractors because contractors pay their own taxes. They provide their own tools and often their own space. Their work is project-based which makes them ideal for jobs you don’t need to do regularly.

Which saves you money!

So, why hire a contractor?

You might hire a contractor to:
• Fill gaps in projects requiring a specialized skill for a limited time.
• Allow you the flexibility to take on new challenges without the expense of hiring permanent employees.
• Supply additional workers to meet looming deadlines or to fill in when a sick employee is out and unable to finish a task.
• Quickly recruit talent for contracts with short turnaround times.
• Minimize supervision by reducing your need to directly manage workers.
• Decrease administrative paperwork and HR time-on-task.

Which saves you time and money!

So, what’s the best approach for you?

Independent contractor vs employees. You need to figure out which approach is best for your company. It may be a blend of both independent contractors and employees. docstrats customers often find adopting a hybrid model works best for them. This means they hire a small number of permanent employees invested in company culture to do what they do best: provide consistent, long-term attention to ongoing assignments while hiring temporary contractors to supply the specific skills needed for occasional and short-term tasks. Read our recent case study on how one of our clients utilized contractors.


If you would like to review our part1 of the series, Employee Vs Contractor: What is the difference, here is the link


For Over 40 Years, Private and Public Companies Have Trusted docstrats. Call us at (518) 432-1233 and let us know how we can help you fulfill your need for project-based contractors.

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Anytime you have a need, we’re here to help!