Here are some tips to help your business hire employees and contractors.
When it comes time for your business to hire a new team member, it’s important that you know the dos and don’ts of hiring and understand how each new hire affects your business. Perhaps most importantly, it’s important that you understand the differences between hiring an employee and hiring a contractor. Here’s what you need to know to help your business hire employees and contractors.
Employee Vs. Contractor
According to the IRS, and employee is an individual who is hired by an employer, trained, and asked to perform duties assigned by others. Employees have income taxes, social security, and Medicare withheld and employers pay unemployment taxes on their wages. When hiring an employee, you will need to file Form W-4. In contrast, contractors are hired to complete a specific job. They work with multiple clients, set their own hours, and are responsible for paying federal taxes on FICA and social security. When hiring a contractor, you will need to file Form W-9.
Tips for Hiring an Employee
- You shouldn’t hire an employee until your business’s profit margins are stable. If your profit margins are still variable, then you are not in an ideal situation to hire.
- When interviewing, make sure you look beyond a potential employee’s resume. Oftentimes, a candidate’s attitude and work ethic are more important than their experience.
- Hiring a new employee is a commitment; to ensure that you aren’t hiring a dud, ask a potential hire to complete a trial period. During this time, watch to see how the candidate handles customer relations, work load, and how they interact with your other staff. This will give you the confidence to hire or let the candidate go.
Tips for Hiring a Contractor
- If you are unsure about your business’s demand, then you’re better off hiring a contractor.
- You should also hire a contractor if a project requires a specialized skill set that your regular employees do not have.
- Because contractors tend to work remotely, it’s important that you maintain open lines on communication. Make sure they understand your expectations and make an effort to check in on them regularly.
Try out these tips to help your business hire employees and contractors. Regardless of whether you hire an employee or contractor, it’s important that you have the proper small business insurance to meet your needs. We at PMC Insurance Group are experts on small business insurance and can help you get the coverage you need. Contact us today to learn more about getting competitive coverage for your small business clients.