As a business grows, it will happen that you’ll need to either hire employees or contractors. There are some advantages to hiring contractors over employees – advantages such as not having to pay someone a full-time wage for part-time work. A few more advantages of hiring contractors over employees are not having to pay payroll taxes, or provide benefits.

But, it can be a tricky process to ensure that independent contractors remain, in the legal sense, independent contractors and do not cross over to employee status. To avoid these pitfalls, learn these best practices for hiring contractors with which to outsource work for your business needs. However, first make sure you understand exactly what an independent contractor is.

A contractor is someone who has their own business providing the services you need. You don’t tell them how to do their job or guide them in any way outside of giving them the parameters for the deliverables. For instance, if you hire a contractor to build your house, you provide a plan, as well as a full description of the materials and what you expect to be the end result. But, you do not tell them what days they must work, what hours they must work, nor do you provide them with clothing or tools to perform the work.

A contractor’s work can be permanent or temporary, but they must use all their own tools and materials and choose what hours to work. The only guidelines are due dates for work to be completed, and what is expected in terms of quality deliverables. A lot of online businesses hire contractors to perform work such as administrative assistance, graphic design, copywriting, marketing and more. To maintain a contractor status there should be no clocking in and out, and no control over the work other than those initial parameters.

Now that you understand the difference between an employee and a contractor, you can go about finding one to fill your needs.

Get a Recommendation

The best place to find contactors is to ask colleagues who they recommend. Typically, a colleague will have similar criteria as you do, and will only recommend someone that they know will do a great job. Without a referral from someone you know, the next best place is to place an advertisement right on your website about the position.

Create a Clear Job Description

Be very clear in your description of what is expected and your budget in terms of fees you will pay. If you aren’t able to write a clear job description, it’s likely that you’re not actually ready to outsource anything. You should be able to describe exactly the tasks that you want done, how often, and what tools the contractor will need to provide.

Check References

Once you’ve identified a few candidates, read their resumes and actually check out their references. Don’t just trust reviews that you read online. Call the references to talk to them on the phone about the person you’re thinking of working with. By speaking directly with someone who has worked with the candidate, you’re more likely to get honest feedback.

Offer Reasonable Pay

The saying, “you get what you pay for” applies to contractors. There are plenty of independent contractors who will work for peanuts, but is their work up to your level? The best way to determine what you’re willing to pay is with your own budget. Also, find out from others what they pay various contractors and then finally, check your conscience. If you are earning 150 dollars an hour but want to pay only 5 dollars an hour, something is not right. Pay reasonable wages for reasonable work and you’ll find contractors who’ll stick with you and do a great job.

Fire Sooner Rather Than Later

Within the first 30 days you’ll know whether the contractor is right for you or not. If it’s not going well, be honest with your assessment. A lot of issues that come up with contractors are due to lack of communication. If you’re not able to communicate effectively with the person you chose then it is not going to work out. Let them move on sooner rather than later so that you can find a more ideal candidate.

By following these best practices, you’re sure to find the perfect contractors for your business now and in the future.