The fast-paced business world can make employers question the benefits of hiring consultant 1099 vs W-2 workers. Independent contracting work was already rising before the recent pandemic, but these numbers have steadily increased in the subsequent years. As we consider this trend, it begs the question: Who should small business employers hire? Regardless of the type of work, many contractors and employees have qualifications that can get the job done. The final decision often relates to your small business model.
Advanced Micro Solutions provides small businesses with accessible and intuitive software. Regardless of the type of worker that you hire, AMS’ tools can assist you in making sure you pay all workers in a timely and tax-compliant manner.
Pros of Hiring Consultant 1099 vs W-2 Workers
Small businesses can benefit from choosing between either type of worker. The pros of hiring 1099 workers are:
Saving Money – You will not need to pay any employee benefits to 1099 workers. Although you may pay more for their overall services, you do not have the same tax requirements as you might with an employee.
Greater Competitiveness – Hiring contractors allows a business to test different workers. This ensures that you can what different individuals may offer your business before bringing someone on in a full-time employee capacity.
On the other hand, reasons to prioritize hiring employees may include:
Company Loyalty – Employees are more likely to stay and support your business when they feel supported. Hiring employees with full-time benefits shows your investment in them.
Less Training – Contractors may have more experience, but employees have more time to acclimate to your company. Hiring employees will reduce turnover rates and streamline any necessary training.
Cons of Using Consultant 1099 vs W-2 Employees
Understanding the disadvantages of hiring certain workers is as important as knowing why each type can benefit your business. Hiring independent contractors means businesses have less control. If you do not want to give the reins to a contractor after you assign them a job, it might make more sense to hire a full- or part-time employee.
However, hiring employees means accepting that you have less financial flexibility. Once you commit to an employee, it is harder for you to redirect how you use them. Unlike contractors, you cannot hire them for a couple of days or hours and then find someone else for another project.
Retaining Your Workers with AMS
Keeping all your workers satisfied will directly influence your business’s overall success. Both independent contractors and W-2 employees want the same thing: reliable pay for their work. A payroll software can help you ensure that your workers receive their payment on time. Business owners can also use AMS’ software tools to stay compliant with all tax and payroll requirements.
AMS’ W-2 and 1099 Software Filer works as a base program for small businesses. We have six modules that you can add onto the package as needed, including a payroll module that tracks the payroll and processes Employee Direct Deposit information. To learn how these features can help with consultant 1099 vs W-2 compliance, explore our 1099-etc Demo or call customer support at (405) 340-0697.