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In the modern world, the hiring forms are changing and the way the companies hire their employees matters. Among all the things that are happening in the modern workforce, such as remote work and the gig economy, hiring independent contractors is kind of a thing now, especially in the United States.
Independent contractors, sometimes also called freelancers, provide goods and services to other entities or the general public as non-employees. If you are an independent contractor, then you are self-employed and all your earnings are subject to self-employment tax.
According to the IRS, the general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.
Before continuing, if you are not sure yet of being an independent contractor here is a blog post from the IRS that is going to help you in this tangle: Independent Contractor (Self-Employed) or Employee?
While turning independent might sound challenging and uncertain, there is a growing support system to ease the transition. A growing number of companies are hiring and supplying skilled contractors for certain time or project-specific assignments.
At Ontop we are matching talented people to companies that need their skills in a service from anywhere in the world removing the uncertainty and tedious administration paperwork for both sides.
The truth is there are many advantages of being an independent contractor than a "normal" employee of a company, here are the top 4 we have identified.
As an independent contractor, you will be in charge of your time, the workload you have and the amount of it you get done. This means that you are your own boss when it comes to the schedule and way to perform it. But this means that you need to be way more organized and compromise with your time. Otherwise, it could become a double-edged sword.
On one hand, you can choose how many jobs you do at a time and manage your workload according to your habits and availability. On the other hand, the more jobs you do, the more income you will have. Always remember that “With great power comes great responsibility”, it might not be easy at first to manage your own hours and resources effectively but eventually you’ll find the way.
An independent contractor has more flexibility than an employee. Being in charge of your own workload lets you manage your own time and take advantage of it. Unlike a “normal” employee, you don’t have to work for eight hours every day - you can work as long (or as little) as you like.
Maybe you’ll finish your work early and have time to watch Netflix or exercise. As an independent contractor, you will have deadlines imposed by you and how you allocate your time to finish them is entirely up to you!
Freelancers/independent contractors tend to earn more than “normal” employees in the same business position - fact. On average, an independent contractor will earn up to 40% more than an employee doing the exact same job.
Why? Because companies don’t have to pay social security tax, provide employee benefits or workers compensation when they are hiring independent contractors.
Besides, when dealing with an independent contractor, the company doesn’t withhold unemployment benefits or medicare… I know you are wondering why this is good, it seems you’re not protected… Well no, because of that, in turn, allows the freelancer/independent contractor to request higher rates and still get hired by companies.
A recent survey by Outsized found that many business leaders are open to the idea of a ‘blended workforce’ to help them become more agile and efficient.
They expect that 15-30% of their future workers will be short-term or project-specific hired hands rather than full-time employees. That backs up research by McKinsey in September 2020 which found that 70% of global executives expect to use more freelancers in the future.
And if it was not enough, a 2020 survey by Forbes found that 49% of hiring managers rate access to highly skilled talent as the main reason for adopting this model. For more detailed information about this, check our blog post “Up to 30% of the future workforce will be independent contractors”.
LET’S ALL BE INDEPENDENT CONTRACTORS!!! *smh*
Just kidding, but if you are interested in this type of work life, you should definitely try it and experience the benefits.
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