Recruiting Contractors vs Employees: What’s the Difference?

By MBO Partners • July 13, 2024

3 MIN

Key points

In order to successfully attract, retain, and re-engage independent workers, it’s important to focus on building a recruiting strategy that is specifically designed to meet the needs of these workers.
The general rule of thumb is that workers are considered to be independent contractors if a client only has control over the results of the work that is done, not how or when it will be done.
In order to successfully recruit independent talent, it’s important to consider the best way to create an experience that’s different from recruiting traditional employees.

Independent contractors and employees are two very different pools of talent and there are big differences when it comes to recruiting each type of talent. In order to successfully attract, retain, and re-engage independent workers, it’s important to focus on building a recruiting strategy that is specifically designed to meet the needs of these workers.

What Makes an Independent Contractor Different?

“Independent contractor” is a legal term for workers who are not labeled “employees” by the IRS. The general rule of thumb is that workers are considered to be independent contractors if a client only has control over the results of the work that is done, not how or when it will be done. Independent contractors operate as their own business entities, often working as sole proprietors or through a legal business entity.

Independent Contractors vs. Employees

Independents are experts in their industry. They bring their skills to a project or task a client engages them to complete. Independent talent come from and work in virtually every sector of the economy, from IT, marketing, and healthcare to education and creative services.

Traditional employees typically receive some sort of training for their job and have some level of oversight from a manager. Independents, on the other hand, already have the expertise needed to complete the job. They are solely responsible for performing the services outlined in a contract or Scope of Work (SOW).

Who are Independent Professionals?

Independent professionals are a segment of the independent workforce. They pursue self-employment not only for the lifestyle and professional benefits it offers but also because it allows them to apply their expertise to long-term, high-billing projects. Compared to other types of independent workers, this group tends to be better educated and have higher income levels.

The Independent Contractor-Client Relationship

Independent professionals provide many important benefits to enterprises. Some of these include staffing flexibility, access to in-demand skills, and cost savings opportunities. This means that they tend to have a lot of choice when it comes to picking their clients.

Top drivers of client satisfaction include: being treated as part of the team, feeling that their work is valued, a positive work environment, opportunities to learn and build new skills, quick and fair compensation, and reasonable processes and procedures.

How to Recruit Skilled Independent Contractors

In order to successfully recruit independent talent, it’s important to consider the best way to create an experience that’s different from recruiting traditional employees. Consider setting up procedures that guarantee smooth onboarding, feedback, and communication.

Where Can I Find Top Independent Talent?

Many managers today use freelance marketplaces, online platforms that connect independent contractors with projects. A marketplace can help enable transactions between contractors and clients directly online. Typically, after filling out a profile, independent talent can search for or be matched with opportunities that fit their skill set. On the other side, you can evaluate and select the right person for the job.

If you decide to simply post project opportunities on your company website, be sure to call out a separation between independent contractor and full-time employee jobs. Once they are engaged, independents value a smooth onboarding process. Creating a welcome site that provides education regarding what to expect during the vetting and engagement process can help to satisfy these needs.

Overall, it is important to keep the needs and desires of independent professionals in mind when creating a recruitment plan. By creating policies that are specifically designed to meet these preferences, you can attract and engage the best and brightest independent talent.