Roadside Assistants

Before You Hire

Whether you are hiring employees or outsourcing to an independent contractor, the selection process is similar: interview several candidates; determine if they have the skills and resources to meet your particular needs; find out if they will be compatible with your working style and environment; and check references. Give yourself adequate time to conduct a search; don't wait until you are desperate before you start looking for help.

If you hire employees, you must be prepared to: withhold payroll taxes and transmit those funds to the appropriate government entity; provide whatever insurance, such as workers' compensation, that may be required by law; and follow other state and federal mandates. In addition, most full-time workers expect a certain amount of benefits, such as paid holidays, vacations, medical and other insurance coverage and retirement benefits. You can handle these issues yourself, or outsource them to a payroll service, a human resources consultant, or an employee-leasing company.

If you're not completely comfortable with the idea of hiring full-time employees, consider part-timers. You'll reduce some of your employment-related costs, because they typically don't look for benefits, and you'll gain some practice and experience in being an employer. To fill short-term positions, try to find MBA students or other interns from a nearby college or university.

You may choose to avoid the burdens of being an employer by hiring independent contractors exclusively, but this approach is not risk-free. The IRS aggressively enforces its rules for classifying workers, and if an audit determines you have been incorrectly classifying employees as independent contractors, you may be held liable for unpaid taxes, interest and penalties--possibly a substantial sum of money.

You're more likely to encounter this type of problem with independent contractors when you are using self-employed individuals; retaining a company generally offers more protection against the independent-contractor classification question.

Toftoy suggests drafting a short contract which stipulates either the terms of employment or the agreement with the independent contractor. This is especially important when employees and contractors have access to confidential information.

However you decide to handle the issue of staffing, be sure your own time is put to your best advantage. "The key is to look for ways to be more efficient and, therefore, more profitable," explains Boardman. "Focus your energies on developing new business and reducing costs, and let your team handle the routine, day-to-day work."

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