What is the difference between hiring contractors and hiring remote workers?

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There are millions of companies hiring contractors which provide services all over the planet. This number is likely to increase as more companies discover the benefits of working with contractors. Both companies and self-employed professionals make use of the remote working model. This generates positive results as the company expands its potential outside the office and off-hours.

In this article, you will learn about the main differences between hiring contractors and hiring remote workers. Discover all the benefits each of these options can offer you and how to choose correctly.

  1. What is a contractor?
  2. What is a remote worker?
  3. Differences between hiring contractors and hiring remote workers
  4. Advantages of hiring contractors
  5. Advantages of hiring remote workers
  6. When to hire a contractor?
  7. When to hire a remote employee?
  8. How can we make the process of hiring contractors and remote workers easier for you?

1. What is a contractor?

A contractor is normally a company or self-employed individual that provides its services to another in exchange for financial consideration without an employment relationship between them. That is, a contractor is any person or company that works for a company without being under its control.

Unlike an ordinary worker, the contractor has tasks with deadlines and a work product. However, the hiring company is not in charge of telling the contractor how to do the job. An independent contractor can work for others, set their work hours, and provide their own tools.

2. What is a remote worker?

Remote work is a modality that allows you to work from home, common offices, or any place other than an office at the company’s headquarters. In most cases, it does not obey schedules but rather tasks or objectives to be met.

This modality has already been booming for several years, but the definitive explosion was with the recent outbreak of COVID-19. Millions of companies had to close their doors, and in order to continue their operations, they had to resort to remote work.

There are many tasks in every field of work that do not require the presence of the employee in the workplace. In addition, they can be done from home with a computer, tablet, or smartphone with an internet connection. This allows staff to work from any country or moment. There are even companies that promote the activity and usually cover internet and telephone costs, etc.

One of the advantages of this is that there will normally be an increase in the company’s productivity. This is because employees who work from home can focus on results and not on schedules to meet.

3. Differences between hiring contractors and hiring remote workers?

A contractor is usually a company, although it can also be a single person providing the service. In this sense, the contractor provides certain services which are specifically detailed in a contract, in exchange for remuneration, which must be made clear in the contract between the parties. Likewise, the contractor is not under the subordination of the company. They must only comply with the assigned activities and deliver them on the corresponding dates.

On the other hand, a remote worker is an employee who works outside the company’s headquarters. Normally, these types of workers -just like contractors- work based on results.

However, a key difference is that even though remote workers are not physically at the company’s headquarters, they are still their employees. Therefore, there is a subordinate relationship between the remote worker and the company, which is not the case with contractors.

Here are the main differences between a contractor and a remote worker:

3.1. Schedules

The contractor, not being under the subordination of the contracting company, is not obliged to comply with a schedule. Its only obligation is to comply with the corresponding activities on time. 

Meanwhile, it may happen that a remote worker also does not have the obligation to comply with a schedule, but this does not happen in all cases. In many cases, remote workers must comply with a schedule designated by the company for which they work.

3.2. Tools

In the case of contractors, they must have their own tools to carry out the job for which they were hired. In the case of remote workers, it can happen both ways. 

For example, if the only thing the remote worker needs is a computer and an Internet connection. They must already have these tools, as the company probably will not provide them with anything in this regard. Nevertheless, the company could eventually decide to provide these tools so that the worker can continue providing their services.

3.3. Results

Contractors must compulsorily perform the tasks for which they were hired. This can happen with a remote worker, but many companies pay more attention to time than results. This depends on the objectives of each business.

3.4. Employment relationship

We are talking about the relationship between the client and the service provider; unlike the remote worker who is under the labor dependency of their company.

Therefore, the consideration to be received by the contractor is called a fee, while the remote worker -like any worker- receives a salary. However, in the case of a remote worker, the figure of commission earnings is also handled without neglecting the mandatory salary they must receive.

4. Advantages of hiring contractors

Hiring the services of a contractor offers your company certain advantages. These are the following:

4.1. Non-existence of an employment relationship

As an employer, you demand the performance of a job in exchange for a price. Therefore, among other things, there is no need to process payroll, deduct taxes, and complicated processes that add more time to your workflow.

4.2 A greater number of workers

Since hiring contractors is a strategy for specific cases, for daily tasks, and to manage certain strategic activities with the contractor, the company will have a greater capacity to hire a greater number of employees to carry out the daily activities of the business.

4.3 Expertise

Normally, when hiring a contractor, it is an expert in the field. This strategy must be used for activities that are not primary in the company, however, they are strategic. That is, they allow the greatest effort to be generated in the activities that generate profitability for the business, which are carried out by the company’s workers. 

Also, in case the contractor is not doing a good job, companies can choose not to hire them again. In contrast, when you have an employee, if you are not satisfied with their job, you must go through a dismissal process.

5. Advantages of hiring remote workers

Companies can fill their positions by opting for a greater range of profiles in all parts of the world. For their part, the worker can benefit from greater autonomy, flexibility, and, as a consequence, a better quality of life. Therefore, these are some advantages of having remote workers in your company:

5.1 Productivity increase

By prioritizing objectives over schedules, there will be greater company productivity. Having an employee who spends many hours in the office but is not productive is a waste of company resources. In contrast, a remote worker must simply respond to a series of tasks assigned to him or her by the company.

5.2 Lower spending on infrastructure

It would be ideal to have a company where there is no need to work from large facilities. Normally, the worker’s office can be their own room or another place that is available for this job. In this way, the company does not have to pay for a physical space for the remote employee.

5.3 More access to high-level professionals

Being a remote job, the range of recruitment possibilities is widened as there are no border barriers to do a certain job. Therefore, you will be able to interview a greater number of candidates from all over the world. In this way, you will be able to select the one that best suits the profile you are looking for.

5.4 Fewer sick leaves, breaks, and/or job desertion

As this type of employee works from home, there are no absences in that sense. Likewise, and depending on the work environment of each company, when working from home, there are no frictions with co-workers or managers that could lead a worker to resign.

5.5 More employee engagement

Remote workers, by not physically attending the headquarters of their company, the only responsibility left to them is to effectively meet the objectives of their role.

Remote work is a working modality that will continue to grow and consolidate throughout the world, due to its advantages for both workers and companies, and although it faces difficulties and challenges, it will not cease to be an outstanding labor trend. This trend will be characterized by the competitiveness of organizations and by the assertiveness of the strategies with which companies assume it.

6. When to hire a contractor?

If you own a business, these are some factors you should consider when hiring a contractor:

  • When the function is not central to your business

The main day-to-day work should be your employees’ responsibility. One of the main functions of contractors is to lighten the workload in areas that are not the main activity of the company and that, consequently, do not generate profitability. These can be the supply of products, certain repairs, among others.

  • When the job can be done by a professional who does not need much supervision

As mentioned previously, one of the advantages of hiring a contractor is expertise. That is to say, we normally refer to people or companies that are specialists in the job that they are going to develop for a company that does not need someone else to constantly supervise their work.

  • That the role is for a certain period of time

A company can be hired for a specific activity that is not permanent, such as a construction company, among others. For this, you do not need an employee since the objective of the employee is to work long-term in the company.

Without a doubt, these are aspects to take into account and depending on the needs of each company you can choose to hire an independent contractor or an employee. On PEO Middle East, we are more than glad to provide you with the services of the best contractors in:

7. When to hire a remote employee?

Here are some of the factors to consider when hiring remote workers:

  • When you do not have or need an office or physical space

This in turn is one of the advantages that remote work offers. If you do not need or do not have enough budgets to rent a workspace, you can opt for this job hiring strategy.

On the other hand, in order to save costs, those who really want to delve into this working concept should analyze which jobs require their worker to be at the company’s workplace. Those in which physical the company does not require being physically present due to the nature of the job must be allowed to work remotely. The company will be able to make better use of its facilities and in turn, the worker will feel more comfortable working from the place of their choosing.

We are happy to provide you with the solutions you need when hiring remote workers in:

8. How can we make the process of hiring contractors and remote workers easier for you?

We know that the selecting and hiring process of good contractors or remote workers is not an easy task. That is why we recommend that you leave this task in the expert hands of PEO Middle East. Our vast experience advising and being a comprehensive solution for many companies in the market is one of the many factors that make us stand out.

We are beyond glad to now share that our services in many locations. In addition, we invite you to learn more about all the ways in which we can assist you, and become a part of PEO Middle East’s family.

Putting together a good work team is essential for your company to evolve in the market. If you want to receive more information you can contact us at [email protected]. Our best representatives will assist you, providing you with solutions and answers to any concerns you may have.

On the other hand, if your intention is to work in a large company in the Middle East, send your CV to The Talent Point‘s best recruiters at thetalentpoint.com. Receive all the information you need for a successful job search by writing to the team at [email protected].

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