More Companies Using Independent Contractors

As the U.S. economy starts to make a slow recovery, companies using independent contractors are on the rise. Independent contractors (also referred to as temporary, supplemental, and freelance workers) enable companies to manage increased work levels—typically in the form of short-term assignments—without investing in permanent employees. Since employers do not provide healthcare and don’t have to pay social security and unemployment insurance taxes for independent contractors, these companies realize some significant cost advantages.

Working Directly with the Company or through an Employment Agency

Independent contractors can be self-employed and hired directly by the employer, or they can work through a contract employment agency. These agencies are compensated by the companies that hire them to find qualified workers for performing specific tasks and/or completing short-term assignments. Independent contractors can derive certain advantages from working with an agency. For example, they can benefit from the variety and number of potential work opportunities that agencies have with companies across industries. Additionally, agencies often manage payment arrangements, provide job preparation services, and may even offer some benefit options.

Pros and Cons

Before you decide whether working as an independent contractor is right for you, consider a few of the most common pros and cons:

Pros:

· Increased flexibility—you choose which temporary job assignments to take and may have some control over specific work arrangements

· Exposure to a variety of industries and experiences

· Opportunities to develop new skills

· Expanded networking prospects

Cons:

· Unpredictable, fluctuating income

· Lapses between work assignments

· No employee-provided benefits, unemployment insurance, and worker’s compensation

· A perception that you are not part of the team, resulting in possible exclusion from certain company privileges and information