5 Tips for Hiring Help for Your Online Business

Online business can be very rewarding, but it can also be time-consuming and take up all of your attention if you’re not careful. In order to maximize your profits and keep your business growing, consider hiring help with certain aspects of it. There are several reasons why you might want to do this, including expanding your products and services, reaching new locations, or just to have more time to focus on other things like marketing or increasing your sales volume. Here are some tips to help you hire the right kind of help for your online business.

1) Understand the Different Types of Assistants

When you’re running an online business, there are a lot of different hats you have to wear. You’re the CEO, the CFO, the COO, and the list goes on. So it’s no wonder that you might need some help to get all of your work done. But before you start hiring, it’s important to understand the different types of assistants and what they can do for you. There are administrative assistants who handle scheduling, billing, payroll processing, travel arrangements and customer service. There are also operations or production assistants who manage inventory control, shipping & receiving or quality control tasks. And then there’s web design which is a specialty job that does not typically fall under the umbrella of an assistant position. It’s possible to hire more than one type of assistant at once if you’re working in more than one area of your business.

2) Know How Much Time You Need

If you don’t know how much time you need, you won’t be able to find the right person to help. Consider what tasks need to be done and how often they need to be completed. You may also want to consider your budget and whether or not you can afford to hire someone full-time or if you need someone part-time.

3) Know What You Need Done

Before you start your search for the perfect virtual assistant, take some time to sit down and figure out exactly what tasks you need help with. Once you have a good understanding of what needs to be done, you can start looking for someone who is qualified and experienced to help you with your specific needs.

4) Choose Your Candidate Carefully

When you’re hiring help for your online business, it’s important to take your time and choose the right candidate. After all, this person will be representing your company, so you want to make sure they have the right skills and attitude. Here are a few tips to help you choose the right person: 

  1. Ask if they have any other side jobs or if they work with other businesses. 
  2. Find out what their strengths are and what their weaknesses are, so that you can match them up with tasks that suit them best. 
  3. Ask how much experience they have in their field (for example: graphic design). The more experience someone has in their field, the better their knowledge of industry-specific terms, processes, rules and regulations.

5) Train Them Well

You’ve finally decided to take the plunge and hire some help for your online business. Congratulations! This is a big step that will free up your time so you can focus on other aspects of running your business. But before you hand over the keys to your virtual kingdom, there are a few things you need to do to set your new hire up for success. First, provide them with clear expectations and detailed instructions. Next, provide them with all the tools they’ll need to complete their tasks. Finally, have regular check-ins to make sure they’re getting it right and providing you with valuable feedback on how they feel about working for you.

What tips and tricks have you learned for the hiring process? Reach out and let us know!

 

 

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Do Personality Tests Help Employers Find the Right Person for the Job?

Personality tests are often used by employers to assess job candidates in hopes of identifying the right person for the job, and they’re becoming more and more popular in today’s competitive job market. The number grows yearly, but right now 22% of businesses actually use personality tests to find job candidates. But are personality tests effective? Does your personality really determine whether you can do the job well or not? And should employers even be using them at all? Let’s discuss some of the pros and cons of personality tests and how accurate they are in determining how a person will perform on the job, as well as how to best use them when hiring someone.

Why do companies use personality tests?

Companies use personality tests when hiring to get a general understanding of an applicant’s character so they can make an informed decision. People with certain personalities tend to work better in certain roles, and personality tests can help companies spot these trends quickly and accurately — but just how accurate are these personality tests, truly? While there is some debate over whether or not companies should use personality tests at all, most experts agree that if used correctly, they are generally very accurate, but they must be used in conjunction with other measures such as cognitive ability.

How do personality tests help companies?

By providing a fast, accurate, and standardized measure of the five primary personality traits (openness, conscientiousness, extraversion, agreeableness, and neuroticism), personality tests help companies narrow down their search to applicants who are most likely to succeed. For example, if an employer is looking for someone with a high level of openness but low levels of extraversion, they can save time by ruling out candidates who score poorly on that particular scale.

Are personality tests worth my time?

Yes, but only if you use them correctly. The key is to employ objective personality tests and a structured hiring process in which your hiring managers fill out personality tests at the same time. In other words, objective personality tests should be used to help hiring managers do the same thing they would have done otherwise—in essence, these psychological tools are just more sophisticated and more efficient than a good gut feeling. And for those taking the tests, it’s important to answer them truthfully to make sure you are a good fit all around.

In the end…do personality tests REALLY help companies hire the perfect person?

Yes and no. Personality tests can help you screen for the right candidate, but they are not the ‘end all, be all.’ We have seen these tests used successfully in the hiring process. In the most successful example we saw, the company sent the tests right at the beginning of the process to determine what type of personality traits they were looking for — but, they also had their staff take them (including the person who they were replacing) to help them narrow down what they wanted out of a candidate.

If they received candidates that tested at the complete opposite end of the spectrum from what they wanted, they declined moving forward. From there it was a sliding scale of what they accepted. The personality test, though, was just the beginning. They then had specific experience they were looking for as well as how folks answered questions in the interviews. As an employer, personality tests can really help when you post a job and you suddenly find yourself flooded with applicants. Just make sure it is not the only measure you are using

For employees out there, we know there are a whole host of different personality tests companies are asking you to take. It’s really up to you whether you want to invest your time in them or not. Some are fast and easy. Some are longer. You need to ask yourself, are you truly interested in the job in its entirety, or did it just sound okay?

And employers, that’s something you should think about too when adding in a personality test. How much time am I willing to ask from a potential candidate before things get serious with them? Because an extra long personality test given too soon at the beginning of the process might just chase your dream candidate away. It’s a balancing act, for sure. How does your organization handle personality tests during the hiring process? Reach out and let us know your take!

 

 

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Do I need to respond to every applicant that applies for a job?

Are you familiar with the term ghosting? This refers to when someone just leaves a situation with absolutely no explanation. You may have experienced this when someone left you hanging and possibly puzzled you as to why.

Have you, as an employer, ghosted job candidates?

Everyone here understands the struggles of being a business owner: there’s never enough time in the day, never enough help when you need it, or there are days where nothing goes right.

All of that plays into how you go about the hiring process. As a small business, sometimes you just don’t have the manpower to do it all. 

You’re probably asking, when is it considered ‘ghosting’ during the hiring process?

To be honest, there isn’t a clear cut line. What we can say is that the further someone makes it into the hiring process, the more they want to hear a response either way. Each company has its own steps to follow, but if you reach out to a candidate to express interest, it’s at this point that most job seekers start to experience ghosting.

77% of job applicants have been ghosted. That might be after an initial screening phone call, after one face-to-face interview, or after multiple interviews. In fact, some candidates have said they were ghosted by potential employers after a final job offer was submitted to them!

As an employer, ghosting comes down to a judgment call. There are lots of tools available to help you not leave job candidates out in the cold as to where their application stands. One thing we recommend is to write a generic template email saying thank you but no thank you. You can send this to all the candidates at once that aren’t moving to the next round, and that lets them know you aren’t ghosting them — which they will appreciate! You’ll appreciate it too because sometimes ghosting job seekers can lead to more of your time being eaten up when they reach out via phone and email to follow up on their application’s status.

But, what about the flip side?

What should you do as an employer if a candidate ghosts you?

In 2020, job seeker ghostings went up 18% from the previous year. The number one reason job seekers say they ghost employers is because they felt the job was not a good fit. Many applicants ghost early on in the process, but job seekers can wait until the last minute too. In fact, employers have reported that a quarter of new hires don’t show up for their first day on the job.

We’ve experienced this ourselves. We have even experienced new hires showing up for the first few days then ghosting with no explanation. In situations like this, what should employers do? Clearly communicate all expectations from day one. Do not close a job application (or, at least, do not stop the interview process) until a job seeker officially accepts a final offer from your company. Encourage applicants to ask questions. Once they are onboarded, schedule regular one-on-one meetings with them to continuously review expectations and allow them to voice how they are feeling. Be open, and they will follow your lead. If you’re looking for more tips, check out these 3 Mistakes to Avoid When Hiring.

We also suggest checking out these 10 Qualities to Look for When Hiring Team Members. Look for these qualities and their consistency through the interview process, and that will help you to not get ghosted once you’ve hired someone.

In a world of technology where we are all connected, we have never seemed further apart. Ghosting is happening on both sides of the aisle, but it’s for the same reason: either an applicant decided the job was not a good fit OR an employer decided the applicant was not a good fit. We suggest using tools available to send short notes to job candidates to let them know what is happening with their application, and be open and honest with your communication. 

Now we would love to know, do you send candidates something to inform them of your decision? How do you handle this process? Let us know!

 

 

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What should I do if a company ghosts me during the hiring process?

It’s not even a spooky season, but you might find yourself encountering more and more ghosts on a regular basis.

Are you familiar with the term ghosting? This refers to when someone just leaves a situation with absolutely no explanation. At least, that’s what the kids are calling it these days! You may have experienced this yourself during the hiring process: you spent lots of time putting together the PERFECT résumé, answering questions in a phone interview, spending time through lots of face-to-face meetings, and then…NOTHING?!?

Ghosting is becoming an all too familiar phenomena in the world of job hunting. In fact, 77% of job seekers have said that potential employers ghosted them. There’s no clear cut line for where ghosting occurs, but you can probably agree that the further you make it in the process, the more a yes or no becomes important to you. But what should you do if you don’t hear back?

#1 Reach out!

Companies ghost candidates for a myriad of reasons, but sometimes they aren’t ghosting you — they’re just working their way through the hiring process which can take some time. It never hurts to reach out and ask about the status of your application. This can show the company your dedication and interest in the position, and it can also get you some peace of mind to know where you stand. 

It’s important, though, to move on if the company is ghosting you. If you have tried to contact them several times with no response, that’s a good indicator they are going in a different direction.

#2 Never stop searching.

Until you have signed a final agreement with an employer, do not stop searching for jobs! This will make sure the hiring process is not at a stand still for you, and always work on innovating. Tweak your cover letter with these 5 tips to stand out to potential employers. Practice your interview skills with family and friends. Ask for feedback from companies that have been responsive to understand what you can do better.

#3 Don’t take it personally.

It helps to put things in perspective and understand that it wasn’t something personal that caused a company to ghost you. We’ve seen situations where companies received over 1,000 applications in a very short period of time which caused them to not be able to respond to everyone. We encourage employers (and employees alike) to communicate instead of ghosting, but there can be extenuating circumstances that prevent that.

One of the businesses that uses HireMyMom wanted to share with you what happens on the business side of things when ghosting might occur:

“As a business owner, I appreciate the tenacity of the person following up. My advice would be to continue that practice, while learning to let it go after a period of time. In my business, it is part of the process. Applying for a job is sales. You make your pitch, follow up, then move on to the next. It has never been my intention to ghost anyone. However, the very fact I came to HireMyMom to get help indicates my own inability to tend to every detail. At least from my side, it’s less about being rude than simply scattered and trying to keep too many plates spinning. Please don’t take it personally.”

Don’t worry, these sorts of ghosts won’t haunt you! If you’re getting ready to start your job search, check out these 14 résumé skills to help you stand out to potential employers. Ghosting is not 100% preventable, but you can refine your materials and skills to the best of your ability to stand out and make it hard for companies to ghost you! Just be open with your communication as to what you expect with your potential employer, remember that it’s just business, and always stay on the hunt for new job listings.

Are you getting ghosted a lot in your job hunt, or is this something you’ve never heard of before? Let us know! 

 

 

 

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Embrace change: Top 3 Talent Acquisition Trends for 2022

The lasting implications of the pandemic and ongoing digital transformations within our working cultures mean that HR managers are dealing with more challenges than ever. Government payouts and forced remote policies are complicating hiring processes, while reimagined trends and new standards for consumer interactions are shaping what employees have come to expect. This leaves us with the decision to lay off employees, reposition them, or hire people with different skill sets.

It’s undeniable that finding talent might get quite expensive and time-consuming. According to Employee Benefit News, employers spend around 33% of a worker’s annual salary during the replacement process. And it takes approximately 24 days to hire someone—not including reviewing resumes to find the best candidates.

Due to the Great Resignation, the talent pool is wider than ever. The crux of the matter is that many of millions of job seekers don’t have enough experience to do the new jobs requiring new skills. Employers are facing a maze of challenges—and they need to find a way out to stay competitive in the market.

I have worked for years to upskill women and help them find flexible work opportunities. But the current work market needs are broader than that. Here’s my take on what you should do to navigate today’s recruitment challenges, only aggravated by the Great Resignation, pandemic, and global competition over talent.

Upskilling and reskilling to optimize employee performance

Transitioning existing employees into new positions is more cost-effective than recruiting. Furthermore,  workforce training allows companies to maximize employee potential and workers to keep their jobs by expanding their skills to different areas.  

A Gartner report shows that 33% of the skills listed in a typical job posting in 2017 are no longer necessary, and new job posts require 10% more skills than previous years. For instance, collaboration platform management, data engineering, being bilingual, and customer empathy are some of the skills in demand for tech companies.

The first step is to identify what kind of skill sets you need to have to run your business effectively and successfully. Then, you can pinpoint what’s missing and find out whom you need to train to close current gaps. Ultimately, team leaders should outline the roadmap towards growth—employee plans should include goals, training schedules, and a target date for completion.

Second, inspire your employees to join upskilling programs. You might want to avoid employee burnout. Remember that they are already very busy and often feel that they don’t have time to learn new skills. By setting learning time into the workload, you can encourage your employees to improve their skills. 

This way, you can have more qualified employees as well as foster loyalty. According to research by IBM, employees are 42% more likely to remain with a company long-term if they received training that helped them perform their work at a higher level.

As an added benefit, upskilling increases employees satisfaction and retention. The statistics are astounding. Companies with a comprehensive training program have a 218% higher income per employee than companies that don’t. They also have a 24% higher profit margin than companies that spend less on this kind of employee development. 

Industry giants have already put a significant amount of money into upskilling. For instance, Amazon invested  $700 million in training programs. I can hear you saying, ”After all, they have all the money—it’s Amazon.” You also have many options. Encourage knowledge sharing and empower collaborative work in your organization. Workshops can be more informative and inspiring than you might think. Creating a safe zone where constructive criticism and feedback are appreciated will help you point your employees in the right direction.

Take your time to explore platforms like Udemy, edX, or Coursera if you don’t have in-house training opportunities. Besides, some Ivy League universities share their lectures on YouTube. When you have the budget, you can offer to pay a certain percentage of tuition and fees towards a certificate or diploma in qualified fields of study.

Advance recruiter expertise for a better employer brand

According to Glassdoor, 86% of job seekers look at a company’s reviews before applying for a job—your reputation precedes you. But an interview with recruiters is the first personal connection with the company, putting significant responsibilities on recruiters’ shoulders. Not doing the job well means time and money lost as well as employer brand damage.

Make sure that your brand ambassadors—recruiters—represent the company in the best way possible. People say that ‘’The best interviews flow like a conversation rather than an interrogation.’’ It might be true—but it has some issues. You can go off the topic and leave some important questions unanswered. Moreover, being like-minded and having common interests can cloud one’s judgment. 

A structured interview helps you be clear about the role, set your expectations and non-negotiables in a candidate, such as skills and traits. This way, it’s more likely that you provide a better candidate experience. Why does it matter? Because 26% of people decline an offer because they had a negative experience during the interview process. 

Along with the skill sets, it’s key to identify if the candidate is a cultural fit for the team. In this context, I refer to goals and missions for both employers and employees. Choosing someone who is skilled but not a good match for your team can impact overall performance, success, and even disrupt company culture. 

Ask the candidates what type of work environment they are most productive in and what management style motivates them. You can also ask if the candidate has any concerns about your company culture based on their research before the interview. The answers will help you understand what the applicants are looking for. 

Lastly, word travels fast. Any negative experience will come back to you as comments on social media accounts, affecting your employer brand. If this has happened to you before, make sure that your HR team gives the appropriate answers. Job seekers are more likely to apply if your company actively manages its brand by responding to reviews and communicating on social media.

Remote work for freedom and flexibility

After getting a taste of freedom, many employees don’t want to go back to the office. One of the most notable benefits of working from home is being able to have a better work-life balance. On top of that, people can plan their days, have more flexible and appealing childcare and eldercare options as well as reduce some expenses. 

From an employer’s perspective, offering remote work is rewarding. Some recruiters simply realize that virtual interviews and remote recruitment are time-saving and efficient methods. Most importantly, offering remote work makes your talent pool the talent ocean.

Even if we’ve been talking about the benefits of working remotely for some time, 44% of companies still don’t allow it—and these companies are limiting their talent pool by simply not offering remote work opportunities. Your ideal candidate might be miles away from you—don’t let distance come between you and top talent. 

Digital nomads are living proof of rising remote work culture. There are more than 15 million digital nomads from the US alone. The ability to work from anywhere in the world, higher salary expectations, and flexibility won’t let digital nomad growth slow down.

Besides offering remote work, consider paying a competitive salary, offering out-of-the-box incentives and bonuses—while creating a work culture that attracts ideal candidates, you can boost employee satisfaction.

The bottom line is that the talent is out there, and you need to ensure that you set a productive environment for the arrival of future candidates and employees.

 

 

 

 

 

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How to Hire a Superstar in a Sizzling Job Market

Hiring is tough for everyone right now–big and small businesses alike are struggling to find the right people. But, as a small business owner, there’s a tremendous pool of workers that you can tap into–moms who are ready to leave the rat race and find work-from-home positions that provide flexibility and meaning. 

The pandemic forced many families to re-evaluate the work-life balance equation and prompted people to reconsider their career trajectories to determine if they are on the right track. Prudential, the global financial services giant’s latest Pulse of the American Worker survey, found that 48% of Americans are rethinking the type of job they want post-pandemic. According to the research, work-life balance is one of the drivers behind the shift.

These changes are leading to the “great resignation” or the “great reshuffling” that you may have heard about. Many are willing to trade the perks and income of a large employer for a more flexible job where they can contribute in a meaningful way. 

As a small business owner looking for a remote team, you are perfectly positioned to scoop up these workers who can bring a wealth of knowledge and resources to the job and your business.

Here’s your guide to tapping into this valuable talent pool to grow your business and add talent that might not ordinarily be available.

 

Focus on Moms 

Focusing on moms is a great place to find your next superstar employee. As the light starts to appear at the end of the pandemic tunnel, many large employers are plotting return-to-work plans. But, many moms who have been working at home for the last year and a half are looking for an alternative to going back to the office and are turning their notice into large employers rather than reshuffle family life to accommodate a commute. 

If you can offer flexibility and a remote job opportunity, you are well-positioned to find an experienced hire who can help your business grow.

To find mom professionals interested in remote job opportunities, partner with a niche job site like HireMyMom to have access to a dedicated pool of professionals looking for remote work. Because HireMyMom charges job seekers a fee to access job listings, all our job seekers are serious about finding work. And, the volume of resumes that flow in is more manageable than the numbers that arrive when jobs are advertised on free job sites.

Employers love us because they know they can find high-quality, highly motivated candidates who want to work from home by partnering with HireMyMom.

 

How to Make Sense of Corporate Speak on a Resume

Once you have created a post and applicants start to roll in, finding the right person may take a little detective work. 

As people transition out of jobs with large employers, resumes may be full of unfamiliar terms and titles that don’t seem to match your needs. But, a few tricks can make those resumes easier to decipher.

As you review resumes, look for department names and activities that line up with your needs. For example, suppose you are looking for someone to do online marketing. In that case, you may review candidates from a diverse pool of experiences that include departments that range from marketing to public affairs. Likewise, titles can vary.

You may see titles as varied as a project manager, marketing associate, or vice president of marketing. Try not to get hung up on the title. 

The key is to look at the person’s specific activities to find the fit for your role. As you look through that list of accomplishments for each job, keep your eyes peeled for the types of skills you need. 

For example, if you know that you need someone with marketing experience, look past the title and department and see if the skills you need are listed. It may be tempting to only look at the most recent job the applicant has held. But, looking back a little can reveal how the applicant’s career has unfolded and provide essential clues about overall abilities and learning agility. Review the cover letter for additional insight.

If all this sounds daunting, you may prefer to use HireMyMom’s Concierge service. We created the Concierge Service for busy entrepreneurs and small business owners, like you, who need to hire help but don’t have the time or desire to go through the time-consuming process.

With our full-service Concierge Service, our HR Specialists will do it all for you from start to finish and present you with the top candidate(s) sourced from a wide array of qualified applicants who will be dedicated to helping your business succeed and grow. 

 

Confronting Common Fears

Many employers look at a resume full of corporate experience or stuffed with fancy titles and decide to take a pass for one of several reasons. Here are some of the most common concerns I hear from employers and some additional things to consider:

Fear: The pay requirements for that person will be too high. 

Reality: The applicant saw the pay range in your posting and decided to apply for the job. Some people value flexibility and opportunity more highly than money at different life phases.

Fear: Experienced workers won’t be happy and might leave quickly.

Reality: Workers with a lot of experience know that it takes time to learn a new job and likely have the breadth of perspective that helps them persevere through the first few months on the job. 

Fear: Experiences at a large organization aren’t transferable to my business.

Reality: Many experiences at large employers still involve small teams, so the experience of a small team is unlikely to be foreign. Also, an experienced employee from a large company may be able to share new ideas or best practices with your team. 

 

Interview to Screen Out Concerns

If you have some of the concerns above or others, rest assured that the proper interview strategy can help you sort through your concerns and find the right person. During the interview:

  • Ask the candidate about her intentions.
  • Inquire about the specific things she is looking for in a new job.
  • Ask about the type of flexibility she is looking for in a job.

These questions can help put your mind at ease and make it easier to feel confident in extending a job offer.

 

Go Ahead, Leap!

If you’ve never hired an experienced person before, the prospect of doing so can feel daunting. But, with a bit of leg work, the right questions, and a partner like HireMyMom, I’m sure you can find the right person to help your business grow.

Once you find your superstar mom employee, send me a note sharing your experience.

 

 

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What is the Best Human Resources Solution for Your Small Business

Having a thriving business can be extremely rewarding especially when a company’s growth results in expanding to onboard extra help.

If a company owner has a managerial background, they will have some knowledge and/or experience when it comes to onboarding, training, and evaluating employees and their work. 

For the entrepreneur who is used to working for themselves and themselves alone, it’s a different story. 

This is where having human resource personnel can be beneficial. The biggest question when it comes to a company’s HR is whether to outsource or insource.

 

Outsourcing vs Insourcing HR

An internal human resource department would be a good decision if a company is mid to large size in scale. Typically this applies to companies with more than a handful of employees.

For small businesses, however, it wouldn’t make sense to hire a full HR department within the organization if they are only dealing with just a few key staff. In this case, it’s much easier and faster to outsource instead. 

 

Why is HR important for small businesses

Having some form of HR in place is necessary for the function of any business that employs others. 

But human resource tasks are redundant, time-consuming, and don’t contribute to the bottom line of a company’s profits. 

Left up to the owner or core staff members to take care of could lead to a negative impact on a business’s productivity and cost the company a lot of money in the long run.

The realized benefit of having an outsourced human resource system in place is immediate. 

The newfound time allows small business owners to focus on the tasks that bring them the most ROI and significantly improve the function of the company’s operations overall.

 

The Top 3 Benefits of HR Outsourcing

  1. Time-Saving 
  2. Cost-Effective
  3. Less Staff Turnover

 

A good HR company will set up a consultation with their client to learn about their needs and help determine the role they are looking to fill for their expansion. They will usually handle all aspects of the job posting itself and screen applicants as the resumes come in.

When it comes to interviewing candidates, the HR company can help write the interview questions, schedule, and conduct them. 

They will select only the most qualified to move forward for the final interview with the company owner. They will even send out courtesy emails to applicants who were not selected for the job.

An outside human resource organization can save small businesses time, money, and result in less staff turnover due to the thorough pre-screening and onboarding process that takes place.

If you’re a small business owner looking to expand your organization and think that outsourcing your human resources would be a good fit for you, Hire My Mom does offer an excellent Concierge Package for consideration. You can learn more about this service here.

 

 

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5 Things You Need to Know Before Hiring an Independent Contractor

5 Things You Need to know Before Hiring an Independent Contractor

Hiring an independent contractor is a big step. It often means that your business is growing and that you are ready to take the next step to bigger and better things. Now that you’ve found the right person and agreed on a scope of work, it’s time to roll up your virtual sleeves and get to work, right?

Not so fast.

While the paperwork required to hire a contractor is much less than a regular employee, there are still important documents that must be completed and collected. Here’s an overview of the who, what, why, where, and how of forms needed when you hire an independent contractor. 

 

Who Qualifies as an Independent Contractor

Let’s start with the who. Any person or business you hire to do work on your behalf, but not as an employee is an independent contractor. 

Usually, independent contractors are in a different business than your own. For example, freelancers like artists, editors and writers are often independent contractors. Independent contractors can also include outside companies doing work for you on an ongoing basis. Think cleaning service, an attorney, or a tax prep person. Basically, independent contractors include anyone you are paying for services and who is not an employee.

The Internal Revenue Service (IRS) has set guidelines for determining if someone is an employee or an independent contractor. As a rule of thumb:

  • You pay independent contractors for the result of their work. 
  • You pay employees for the ability to control how the work is done.

 

Why Independent Contractor Status Matters

When you hire an independent contractor, you aren’t required to withhold federal or state taxes or Social Security and Medicare taxes (collectively known as payroll taxes) from their pay. That’s because rather than paying them a salary or a wage, your business is paying another business for services.

Independent contractors are self-employed/owners of their own business and are responsible for reporting their income and paying the associated taxes. (You can learn more from irs.gov.)

When you hire people as employees, you are responsible for withholding the appropriate payroll taxes. This applies for part-time, full-time, and seasonal employees.

 

When to Call the Pros

Issues around employment status and taxes can be thorny.  The IRS offers some guidelines for making this determination. But, it’s wise to consult an attorney or accountant with specific questions or for advice when hiring people or businesses to do work on your behalf. While this article is a good overview of your obligations when hiring independent contractors, we aren’t attorneys and we don’t practice law here at HireMyMom.com. 

 

Start a File for Each Contractor

Before we talk about which forms to collect from your contractor and when, let’s take a step back and consider why it’s important to collect them. While you aren’t required to share information about your independent contractors with the IRS, there are still good reasons for keeping a file on each contractor. 

  • Maintaining project overviews and any feedback you share with the contractor, helps you keep good records about your projects– including how and when they were completed, who did the work, and what you paid to have the work done.
  • If you are ever audited, you can easily pull information about each contractor to share, as needed. 
  • Keeping a contractor file makes it easier for you to connect with contractors in the future. 

 

Collecting the Right Forms

Collecting the correct forms from independent contractors is often an overlooked step that offers important benefits for your business and the contractor you are hiring. Securing the correct forms at the beginning of your relationship can set you up for greater success later. It’s easier to have the information on file before the project begins when you and your contractor are in more constant communication. 

Collecting the forms early gives you peace of mind that you’ve checked all the boxes with your independent contractor.  According to The Balance Small Business, there are several forms to collect and keep on file, including: 

  • A completed W-9 tax form. This form and directions to complete it are both available online at irs.gov and should be on file before you pay the contractor. Once you collect the W-9 form, hold on to it for your files in case you need to share it with an auditor. (You don’t need to send it to the IRS.)
    • While you don’t need to withhold payroll taxes from an independent contractor, you are responsible for issuing them at 1099 Form for Non-Employee Compensation at the end of each calendar year. 
    • Independent contractors use the 1099 Form to report their business income to the IRS.  
  • A contract. When you start a new relationship with an independent contractor, establish the terms of your engagement with a written contract. The contact should:
    • Outline that the person you are hiring is an independent contractor and not an employee. It’s important that the person you are hiring understands that you will not be withholding payroll taxes because he/she is not an employee.
    • Stipulate who owns the finished work product. (This is especially important for creative services such as art work or design.)
    • Outline the scope of work to be performed.
    • Document billing rates, invoicing, payment processing and timing. Settling on this at the beginning of the project can make for a more productive relationship.
  • A resume and reference information. You know why you hired this person to do work on your behalf, but keeping a resume and reference information on file makes it easier for others to review, if needed. You may even have your contractors complete an application so you can easily access pertinent information about them in the future.

 

Additional Forms to Consider

In addition to the items outlined above, your business may dictate the need for additional forms, according to The Balance Small Business. For example:

  • A non-disclosure agreement (NDA). Sometimes called a confidentiality agreement, this gives you confidence that your independent contractor is not sharing your business plans or trade secrets with competitors or other businesses. 
  • A non-compete agreement puts restrictions on the contractor’s ability to take your customers or clients to a competitor. These documents tend to outline specific actions and timeframes where the restrictions apply.  
  • A non-solicitation agreement keeps an independent contractor from working for your competition while also doing work for you. This can be tricky because sometimes you want a contractor with expertise in your industry, which means he/she also works for other similar businesses.

Consult a lawyer if you are considering asking your contractor to sign any of these items. State laws vary considerably. Working with an attorney can help make sure that any steps you’re considering are legal and advisable based on your state, objectives, and situation.

 

We’d Love to Hear From You

Tell us how you found your independent contractor and the success you experienced.

 

 

Disclaimer. The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this site without seeking legal or other professional advice.

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Challenging Times Call for Creative Hiring Solutions

In today’s economy, many businesses are having to downsize and cut back expenses every place possible in order to survive. This includes letting valued employees go – often times with much regret. And unfortunately some believe our economy will not improve for a couple of years. So what are businesses to do? How do you support and grow a business if your employee pool is or will be dwindling? Are there creative hiring solutions?

Outsourcing is a Creative Hiring Solution

The good news is that many businesses are finding a perfect solution in outsourcing to independent professionals. These professionals offer the same skills and experience as an on-site employee yet they work as an independent, not requiring employee benefits or office space. One of the largest pools of independent professionals is mom professionals who have left the workforce voluntarily or involuntarily.

Many of them are looking for ways especially now to help supplement their families’ income. And in some cases support their family altogether if their spouse has been laid off. These professionals are experienced and educated but are seeking the freedom and flexibility to work hours that are more conducive to having a family. Some of them work part time and some work full time. Some of them work on an hourly basis and others work on a salary or by the project. What’s great for them and for the company is that studies have proven that a person’s productivity actually goes up when working from a home office. This is at least partly due to the fact that independent workers want to prove themselves and go above and beyond expectations to ensure the work keeps flowing to them.

A Win-Win Solutions

The beauty of it is that these creative hiring solutions is a win-win for the company and the professional. In the majority of cases the company saves on payroll and employee benefits and the professional is pleased to have flexible work and puts forth his or her best effort to make sure the work keeps coming in. For more information on hiring at home professionals, visit www.HireMyMom.com.

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Lesley Pyle is the founder and president of HBWM.com Inc. which includes the national association of Home-Based Working Moms helping moms network, learn and grow in their role as a Home-Based Working Mom and HireMyMom.com connecting at-home Mom Professionals with home-based jobs and projects in virtually every career field.  Pyle has been featured in numerous publications including Forbes, Entrepreneur, Wall Street Journal, USA Today, Home Office Computing, and many others.  Twitter @lesleypyle and @hiremymom

Check out these other great articles about tips for mom as a work from home professional.Also check out our current job postings for mom professionals.

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7 Essentials To An Independent Contractor Agreement

As a business owner, you often take on the roles of many people. You can find yourself working long hours and doing all of the work by yourself to keep your company afloat. When it gets so much that you can no longer keep up, it’s time to hire!

You’ll want to determine if the job you are hiring for is a contractor role or an employee role. You can learn the definitions on those here and get some additional advice here. 

If you are hiring freelancers or contractors an independent contractor’s agreement will help you outline the details of the work to be performed, terms of the agreement, compensation, and any additional important details. 

In today’s article, we will discuss the importance of a contractors’ agreement and some key components you may want to include when creating one*.

Statement of Relationship

This is the opening of the contract that discloses the parties the agreement is between. The Company name is indicated and from that point on, referred to as “The Company”. The Contractor’s name and his/her company (if applicable) is also indicated and referred to as “The Contractor” from that point on.

This piece of the agreement is extremely important to get right especially when it comes to the contractor being able to prove his or her work status. It protects against employee misclassification.

The contractor-client (Company) relationship is a business relationship, not an employer-employee one.

Scope of Work

This part of the contract highlights the work the Contractor will be doing for your Company. If there was an SOW (Statement of Work) drawn up (which is recommended), it would be included here.

Note: A Statement of Work (SOW) is a document within the contract that describes the scope of work and/or project being performed as well as performance expectations.

Payment and Billing Terms

This is an important part of the contract. Rates agreed upon should clearly be disclosed here along with the terms of billing and form of payment.

The rate of pay should have been discussed and agreed to ahead of time along with any commission rates (if applicable). For payment, it should be discussed with the Contractor how you would like to be invoiced and the payment dates.

Party Responsibilities

This part of the agreement applies especially if there are multiple departments involved within your Company that your Contractor will be performing work for or collaborating with. This is a good opportunity to present the review and approval process, set the standards of communication and to also have your Contractor provide proof of insurance.

Deadlines and Timelines

The Contract term (length) should go in this section of the agreement. If you don’t have one, it’s good to at least set a contract review/renewal date.

If this contract is for a project, the timeline or approximate timeline should be specified. If the project is large enough, milestones can be outlined as well. Clear goals and targets should be outlined. The more details you can include the better. This will ensure clear expectations and communication between yourself and your Contractor.

Termination

Not all agreements work out. Sometimes they have to come to a close. All contracts need to have a termination clause.

The termination clause offers the right for both parties to cancel. Reasons to end the contract should be clearly stated. Some considerations include nonpayment, breach of contract, and business disruption.

When considering the termination timeline most contracts can end with 30 days written notice from either side.

Non-Disclosure/No Compete Clause

Unless your contractor is designated to only working with you at the time of the agreement, having them sign a Non-Disclosure or No Compete clause might be difficult.

If they have more than one client, chances are, at some point, they might be working with your competitors.

You can, however, cater to the non-disclosure specifically in reference to the information you share with them about your company. 

Other Considerations

It’s always advisable to have a legal advisor review your contract before it officially falls into the hands of a Contractor. Once reviewed, it may be able to act as a template for future contract work as well.

 

For more information, see:

 

*HireMyMom.com (HBWM.com Inc.) does not provide tax or legal advice. The material contained herein is for informational purposes only and does not constitute tax or legal advice. Readers should consult with their own tax advisor or attorney with regard to their personal and business tax situation.

We have some amazing Contractors right here on HireMyMom. You can see what other business owners are saying about our services here.

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