Freelancing or working as a contractor is becoming an increasingly attractive option for many skilled workers, and that trend is bound to continue because many businesses now favour temporary staffing for some projects. Contractors are capable of adding value and can help with key business issues such as digital transformation initiatives, supporting rapid business growth, and helping companies cope with transition periods that many have to go through.
If a company employs an individual directly it is responsible for collecting the tax and national insurance contributions payable. That is not the case if a contractor is employed on a temporary basis. A contractor that uses an umbrella company does not have to worry about his or her tax affairs or other legal responsibilities as the company administers them. Such workers are covered by the government’s IR35 legislation that refers directly to contract work. Umbrella companies are very useful because if a contractor needs help with IR35, expert advice is readily available.
The key benefits of using contractors include:
Contractors provide businesses with flexibility of all kinds. They can be employed on a short-term basis, which means if a certain project is completed on time or if a budget is cut abruptly, the contractor will just move on to work for another client.
The usefulness of contracting flexibility also applies when there are peaks and troughs in demand and a fluctuating workload is not unusual. In such circumstances the contractor arrangement is more efficient and works significantly better than hiring permanent members of staff. It would also be unnecessary to make redundancies when there is a shortage of work. Contractors can be hired to quickly and efficiently work on a time-sensitive project and can also assist overburdened departments before a suitable candidate is found to fill the role permanently.
Contractors provide specialised skills
When an organization is going through a transitional period and needs work completed with a quick turnaround but there are not sufficient staff in-house, contractors are the solution. Contractors with the specific skill set needed can be brought onboard. You will find that most contractors have many years of experience in a certain niche area and they will not need to be trained.
Most of the independent contractors available possess the relevant qualifications required to perform their job and will have a good market overview which is in line with the current relevant legislation. Due to a diverse array of organizational experience and having worked for various companies, contractors could bring unique solutions to your business.
Contractors help in cutting costs
Contractors usually cost more per-hour than permanently employed staff, but in the long run, they help the company to save a lot of money. The national insurance and other benefits for permanent employees do cost more for the company, and recruiting and training permanent employees is a hectic and expensive process. Contracting promotes efficiency as there are no costs other than pay associated with it, and the skills required are available from day one of hiring.
Although contractors may not be right for every situation, they can provide a better option in order for you to meet the staffing needs required.