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Employee or Independent Contractor

Business Expansion Can Create Unique Problems

One of the best problems for any business to have is the need to expand. When a business grows beyond its capacity to properly serve its customer base, expansion is a must for it to survive. But just as expansion is a great period for a business, the transition can be dangerous for a growing company if not addressed properly. It is not uncommon for a company to experience a difficult business cycle after a disorganized and awkward expansion leaves their employees and customers feeling alienated, and profits can seriously suffer and sometimes never recover.

Getting Staffing Right during Business Expansion

To ensure a smooth transition when expanding, the first need a business must address is proper staffing. The people that a company employs are the very life blood that helps it to flourish and grow. When the time for expansion comes, prudent managers and owners will take the opportunity to review and understand their true employee needs and find the best ways to utilize current and future employees as well as utilizing independent contractors during and after the expansion.

Short Transition Times Are Best for Smooth Expansion

Transitional periods of expansion are temporary. Whether the business is expanding to a new location, enlarging their current facility, or simply bringing on more personnel to keep up with consumer demand, the transition is the key to how quickly the company can get back up and running. A timely process for expansion is vital to ensuring continued customer confidence, and having the proper personnel on hand can help to make this happen.

Determining Pros and Cons of Employees and Independent Contractors

The first step is to determine what needs to be accomplished and whether the task can be handled best by in-house employees or independent contractors. Laws for classifying an independent contractor vary from state to state, so consulting with an attorney is an important step in determining if an independent contractor can be utilized. Generally, if the job tasks are temporary to the expansion only, an independent contractor might be a better option than hiring a full-time employee. As long as a non-disclosure agreement is signed by all parties to protect sensitive company information, independent contractors are a great option to fill a temporary void, especially during a transition.

Even if the transitional needs of the company extend into the future, depending on the nature of the work that needs to be accomplished, an independent contractor might still be a viable option that can save a company a great deal of time and money and should be taken under consideration. Independent contractors are experts in the field in which they work, and they have the ability to step in and have an immediate impact, which can be crucial in the timely completion of a business expansion.

When a Non-Disclosure Agreement Is Useful

Having a non-disclosure agreement in place ensures that any company information that is disclosed to the contractor remains confidential after their services are no longer needed by the company.

When Employees Are the Best Choice

If the task that needs to be addressed during the transition will be a more permanent position or if it can transition into filling a need elsewhere in the company after the expansion is complete, then it might be more advisable to hire a full-time employee.

A good rule of thumb is that if the work to be completed is an integral and permanent part of the business, then the person should be classified as an employee. If the work is considered temporary, even if it extends well beyond the period of expansion, then it is possible that an independent contractor can fill the position.

Reasons for Using Independent Contractors

Basically, independent contractors fulfill a specialized need in a business that is not expected to be a permanent position, even though it might continue on for a prolonged period of time. Again, consulting with a labor attorney is always advisable in these situations.

While there is a great deal more that is involved with the expansion of a business, the key to a seamless transition is to have the right personnel in place when they are needed. Utilizing specialized independent contractors who have the experience and knowledge to fill temporary positions that will make the transition smoother is an excellent way to minimize any drawbacks to rebuilding or relocating a business. Hiring a professional to step in and get tasks done in an organized and efficient manner can go a long way toward keeping customers happy and confident that the company will continue to do business as usual.

How to Create an Independent Contractor Agreement

Use our advanced independent contractor agreement template to create your agreement online in minutes.