The Benefits and Disadvantages of Hiring Consultants

You can reap some rewards by contracting with independent contractors/consultants instead of hiring new employees. The advantages include:

• You get special expertise
• You use them as needed
• You save on tax contributions
• You save on benefits
• You have flexibility in the relationship
• You can terminate them easier than terminating employees

But using contractors/consultants can have its own set of disadvantages:

• You may not have the same continuity in the relationship as you would have with an employee
• You may have to pay high fees to the consultant
• You have limited control over the consultant
• You run the risk of tax problems if the consultant in fact operates like an employee