5 Ways to Know Whether to Hire an Independent Contractor, Temp, or FTE

The modern workforce is more diverse than ever. More and more companies are tapping into the independent workforce, which includes independent contractors, consultants, and freelancers, to fill crucial talent gaps.

Independent contractors come with plenty of perks. They can boost your organization’s agility, keep operations running smoothly, and bring the specialized skills needed for your projects. Understanding how and when to tap into this talent pool can give your business a real edge, helping you stay competitive and responsive to changing demands.

Before choosing the right type of talent for a project or job, it’s important to understand the differences between each kind of worker. Ask yourself the following questions to determine which type of talent—independent contractor, a temporary employee, or a full-time employee—is best suited to your company’s needs.

1. Is this an ongoing business need?

Full-time employees are often the ideal solution for handling constant, ongoing business needs. With a full-time employee, a manager can have full control the work being performed and control the hours and location of the work.

Temporary workers may be helpful in fulfilling a seasonal or short-term need, but they are subject to certain regulations and may require additional fees if retained through a third party like a staffing company. Independent contractors tend to be the most flexible route for short-term project needs, providing access to specialized expertise and a wide pool of talent to choose from.

2. How much control do I want over the work?

If the work you need done is a core competency of your company, it generally makes sense to manage it in-house with full-time employees. That said, independent talent can still be a valuable way to support these key areas whenever extra expertise or flexibility is needed.

Just keep in mind that control is a key determinate in properly classifying independent contractors. When you engage independent talent, you are managing a business-to-business relationship. Independents have full control over when, where, and how their work is performed.

3. Is this a project with a definitive timeline?

Independent contractors allow companies to acquire talent for a specific period of time without an ongoing commitment—financial or otherwise. Full-time employees are a better fit for work that is ongoing or unable to be clearly defined.

4. Can the work be packaged in defined deliverables?

If a project or work has clearly defined success metrics and can be articulated into a deliverable, independent talent are a solid option. Independent contractors are responsible for performing the services outlined in a contractor Scope of Work (SOW).

On the other hand, if you simply need more people to perform a job that internal employees are already doing, that gap should be filled by a full-time or temporary employee.

5. Is this a short-term or constant need?

Think about whether your business need is steady or varies over time. For short-term or seasonal demands, bringing in an independent contractor or temporary employee might be your best bet, offering the flexibility to bring on talent only when it’s needed. On the other hand, if the need is constant, consider hiring a full-time employee. Independent contractors can be engaged for a long-term project, so long as the project has clear objectives and can be easily communicated and measured.

Discover more about these different worker types in our guide: Independent Contractor, Temp, or Full-Time Employee?

The information provided in the MBO Blog does not constitute legal, tax or financial advice. It does not take into account your particular circumstances, objectives, legal and financial situation or needs.  Before acting on any information in the MBO Blog you should consider the appropriateness of the information for your situation in consultation with a professional advisor of your choosing.