First time hiring a contractor? Three things to consider before you do

For many small businesses, hiring a first employee is daunting. Paying your new staff member a part- or full-time salary is a big and scary commitment, and if you’re on the fence about it, chances are you’re probably not ready for a permanent team member just yet.

So, what do you do when you need a hand, but don’t want to commit to a permanent staff member? Contractors!

We help companies recruit freelancers and skilled contractors all the time, and in my time as CEO, I’ve seen first-hand the many issues that can come up if you don’t hire the right person, or don’t draw up a strong contract. I’ve put together some tips to help you get it right the first time so that you get the most out of your contractor, and they get the most out of you!

Tip #1: Make sure terms of the agreement are clear in the contract

One of the biggest slip-ups we see in the recruitment of contractors is contracts not clearly outlining small details. If you are giving your contractor the freedom to work from home, make sure it’s clear in the contract. Similarly, if they are required in the office or on-site full time, or if they’re welcome to work from both locations, make sure these locations are clearly listed in the agreement. Particularly in a COVID-19 world, this will save you from tricky conversations if a contractor is unhappy with being asked to return to the office.

If you’re in doubt, don’t hesitate to engage your lawyer to help you write up a watertight agreement.

Tip #2: Consider the risk

If you run a consultancy of any kind, consider whether or not your contractor will need to be client-facing. If your contractor will be exposed to clients, this poses a risk to your reputation. That’s not to say they shouldn’t be client-facing, but exercise an extra level of caution when you’re hiring to make sure you get the right fit for your reputation, and add non-compete clauses in the agreement to stop them from poaching your clients.

Tip #3: Make sure you’re comfortable with their rates and payment plan

Contractors will always be more expensive than permanent employees due to the short-term nature of their work, so you need to make sure you’re comfortable with the rate you’re paying them. Before you start meeting with candidates, crunch the numbers and set a budget you’re happy with, but do keep in mind that the pay rate should be dearer than what they would earn as a salaried employee.

When you start meeting with people, be sure to ask them whether they charge by the hour or by the day, and make sure you write the contract accordingly so you aren’t hit with unexpected fees if your contractor goes over their hours.

Don’t be put off by negotiating, either. It’s highly likely your candidate will want to negotiate with you, so set your financial boundaries but be open to the conversation.

Hiring an employee doesn’t need to be scary, so making sure you’re ready for conversations with contractors before they happen, and following these tips, will help you have a less stressful experience. And most importantly, embrace the process! Expanding your business is such an exciting time, so enjoy every minute of looking for a new team member who will care about your cause and be willing to go the extra mile with you.

Kris Grant, CEO, ASPL Group