The rise of independent contractors is reshaping today’s workforce. In the U.S., the number of full-time contractors jumped from 15.3 million in 2019 to 26 million in 2023—a massive increase in just a few years.
An independent contractor is someone who provides services to a company but isn’t an employee. They’re self-employed and typically work on a project-by-project basis. Hiring them can bring flexibility, expertise, and cost savings.
Below, we’ll cover the benefits of hiring contractors, what to watch for, and how to find the right one for your needs.
What Are Independent Contractors?
If you need a skilled professional for a specific project but don’t want to hire full-time staff, an independent contractor might be the solution. They can handle specialized work—from electricians to designers—and help you avoid the costs and paperwork that come with employees.
Contractors are self-directed. They decide how and when to work, often serve multiple clients, and provide their own tools. You don’t manage them day to day or provide benefits. Instead, you issue a 1099 form, and they handle their own taxes.
5 Reasons To Hire an Independent Contractor
More businesses are turning to contractors—and for good reason. Here are five key benefits:
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Lower Overhead Costs
You only pay for services rendered—no benefits, equipment, or office space required. -
Minimal Supervision
Contractors are experienced professionals who need little oversight, freeing you to focus on other priorities. -
Flexibility
Scale your workforce up or down depending on workload—ideal for seasonal work or one-off projects. -
Specialized Skills
Access expertise your team may lack, enabling you to take on more diverse projects. -
Global Talent
Remote contracting lets you hire the best people, wherever they are in the world.
Potential Drawbacks of Hiring Independent Contractors
Contractors offer plenty of advantages, but there are challenges to keep in mind:
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Misclassification Risks – Treating a contractor like an employee can lead to serious legal and tax penalties.
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Less Control – You can’t dictate how or when contractors work, only what needs to be delivered.
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Availability – Contractors may juggle multiple clients, affecting their response time.
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Limited Continuity – Since they work per project, it can be harder to build long-term relationships.
What To Do Before Hiring a Contractor
Take these steps before you begin your search:
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Set a Budget – Determine what you can pay, including possible extra costs like materials or rush fees.
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Ensure Compliance – Review local and federal laws on classification and taxes.
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Classify Workers Correctly – Misclassification can lead to costly penalties—get expert advice if unsure.
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Use a Written Contract – Clearly define scope, deadlines, pay, and ownership of work.
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Understand Tax Obligations – Report payments correctly using 1099 forms and other required documentation.
What To Look for in a Contractor
When hiring, focus on these qualities:
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Relevant Experience – Proven success with similar projects.
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Reliability – Clear communication, punctuality, and professionalism.
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Positive References or Reviews – Check past client feedback.
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Transparent Pricing – Fair, upfront rates with no hidden fees.
How To Hire a Contractor: Step-by-Step
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Define Your Project – Identify goals, tasks, timeline, and budget.
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Search for Qualified Candidates – Use job boards, freelance platforms, or referrals.
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Review Portfolios & Proposals – Assess experience, approach, and pricing.
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Conduct Interviews – Discuss details and gauge communication style.
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Select the Right Fit – Choose based on skills, reliability, and professionalism.
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Verify Compliance – Ensure proper licenses, tax IDs, and legal status.
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Sign a Contract – Put all expectations in writing.
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Manage the Relationship – Communicate regularly and pay promptly.
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Wrap Up – Review final work, complete payment, and maintain a positive relationship for future projects.
5 Best Practices for Working With Contractors
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Set Clear Expectations – Outline deliverables, goals, and deadlines upfront.
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Always Use a Contract – Protects both sides and minimizes misunderstandings.
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Maintain Open Communication – Check in regularly without micromanaging.
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Keep Organized Records – Track contracts, invoices, and payments for tax and legal purposes.
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Be Professional and Respectful – Treat contractors as valued partners for better long-term results.
Stay Organized and Manage Customers on the Go
Managing independent contractors is just one part of running your business. With Joist, you can organize customer data, track projects, and access information from anywhere. Streamline your operations—and make managing jobs simpler than ever.
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The Rise of Independent Contractors: Why More Businesses Are Turning to Them
The way people work is changing fast. More and more professionals are choosing to work for themselves instead of sticking to a 9-to-5 job. In fact, the number of full-time independent contractors in the U.S. jumped from 15.3 million in 2019 to 26 million in 2023 — that’s a huge jump in just a few years!
So, what exactly does this mean for business owners like you?
It means that hiring independent contractors is becoming one of the smartest ways to get things done — especially when you need skilled help without the long-term commitment of a full-time employee.
Let’s break down the benefits, the potential challenges, and how to find the right contractor for your next project.
What Is an Independent Contractor?
Think of an independent contractor as a self-employed pro who offers services to your company — but isn’t on your payroll. They usually work on specific projects and handle their own taxes, tools, and schedules.
You don’t need to manage them day to day or provide benefits. You just agree on the work, set a deadline, pay for the job, and they take it from there. At tax time, you’ll send them a 1099 form instead of the usual employee paperwork.
From web designers to electricians to landscapers — independent contractors cover just about every skill out there.
5 Reasons Businesses Love Hiring Contractors
It’s easy to see why more companies are going this route. Here are the top reasons:
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Lower Costs – You only pay for the work done. No benefits, no office space, no overhead.
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Less Supervision – Contractors are pros. They know their stuff and don’t need to be micromanaged.
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Flexibility – Bring in help when you need it, and scale back when you don’t. Perfect for one-off projects or busy seasons.
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Specialized Skills – Need something done that’s outside your team’s expertise? A contractor can fill that gap fast.
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Access to Global Talent – With remote work, you’re not limited to local talent anymore. You can hire the best person for the job — anywhere in the world.
A Few Things To Watch Out For
Of course, hiring contractors isn’t all smooth sailing. Here are a few things to keep in mind:
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Don’t Misclassify Them. Accidentally treating a contractor like an employee can get you in legal trouble (and cost you).
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You Have Less Control. Contractors set their own hours and methods — you can’t tell them exactly how to work.
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Availability May Vary. They might be juggling other clients, which could impact timing.
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Short-Term Relationships. Since contractors usually work project to project, it can be harder to build long-term loyalty.
What To Do Before You Hire
Before bringing someone on board, take a few simple steps to protect yourself (and your business):
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Set a Budget. Know what you can spend and whether you’ll cover materials or rush fees.
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Know the Rules. Each state has its own laws for contractors and taxes — make sure you’re in compliance.
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Get It in Writing. Always use a contract that clearly spells out scope, deadlines, and payment terms.
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Double-Check Classification. Unsure if someone qualifies as a contractor? Talk to an expert before hiring.
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Understand Your Tax Role. You don’t withhold taxes for contractors, but you still need to report their pay with a 1099.
What To Look for in a Contractor
When you’re ready to hire, look for someone who has:
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Proven Experience. Have they done similar work before?
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Great Communication. Do they respond quickly and clearly?
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Solid References or Reviews. Check what past clients say about them.
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Transparent Pricing. No hidden fees or vague estimates — everything should be upfront.
How To Hire the Right Contractor (Step by Step)
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Define Your Project. What exactly do you need done? What’s your budget and deadline?
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Search Smart. Use freelance sites, referrals, or industry networks to find candidates.
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Review Their Work. Check portfolios or sample projects.
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Interview a Few People. You’ll learn a lot about their communication style and professionalism.
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Choose the Best Fit. Don’t just pick based on price — choose who best understands your project.
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Check Legal Stuff. Make sure they have the right business licenses or tax setup.
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Sign a Contract. Outline the work, payment schedule, and ownership of deliverables.
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Keep in Touch. Communicate often and pay promptly.
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Wrap It Up. Once the project’s done, close it out professionally — and if it went well, keep them in mind for next time.
5 Best Practices for Working With Contractors
To make the experience smooth for both sides:
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Set Clear Expectations. Be upfront about what you want and when.
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Put Everything in Writing. A written contract protects everyone involved.
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Stay in Touch. Don’t hover, but don’t disappear either.
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Keep Good Records. Save contracts, invoices, and payments for tax time.
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Be Respectful. Treat your contractors like partners — not temps. The better the relationship, the better the results.