Looking to Hire an Independent Contractor?

August 22, 2012

Consultants and independent contractors can be a great addition to your team when internal resources are stretched. 

Doing so is a viable business strategy to augment permanent staff or to get one-time projects completed, said Pam King, president/CEO of the Better Business Bureau serving Northern Colorado and Wyoming.  

 “Technology is on our side when it comes to having consultants work remotely, but it’s important to take the time in the hiring process to ensure that you don’t waste your business’s resources on an independent contractor who doesn’t live up to your expectations.” 

The BBB suggests the following tips to help find consultants who are right fit for your business: 

Ascertain the need. Examine the specifics of your staffing issue, the project, your objective and the time frame. Consider whether your immediate need is a symptom of a larger issue or simply due to lack of internal manpower. You may determine that one of your present employees has both the ability and the desire to do the job. 

Ask for referrals. Your business network is a great place to get referrals of potential candidates. Check websites such as LinkedIn to find people you may know. Ask people you trust for referrals to qualified consulting firms or sole practitioners. Contact each referral with a brief letter, email or phone call describing the project, your industry conditions and your management style. 

Meet with top prospects. Ask pointed questions to verify that the consultant has experience with the specific problem or project and the industry.  

Check references. In addition to checking professional references, ask potential consultants if they are accredited by a national association. Some associations do extensive background checks and members usually must be in business for at least five years. They may also hold members to professional codes of conduct. 

Get a written proposal. Reliable consultants will provide a written, detailed proposal before the contract is signed. Without specifics you could end up losing valuable time and money. 

Clearly spell out all fees. Consultants can charge a fixed fee, an hourly rate or a monthly retainer. Hourly rates could raise your costs substantially, so ask the consultant to put a ceiling on the job to cap your expenses. And make sure the consultant knows who is authorized to assign them additional tasks not spelled out in the contract. Also beware of the consultant who asks for all of the money upfront. Depending upon the industry, it can be customary to pay as much as one-third to one-half in advance, with the rest due on specific dates or upon completion of the project. 

Keep good records. For each consultant or independent contractor you hire, establish a file, which should contain the consultant’s contract, invoices, copies of 1099 forms and any other information that shows the worker is operating an independent business.