4 Best Practices for Hiring Contractors & Freelancers in 2021

Companies today have a myriad of options to choose from when it comes to hiring talent. They can hire full time employees or freelancers, and they can even hire remote contract workers. But how do you know which classification of worker will best suit the needs of your business? And how will you ensure the legality of your hiring and payment processing? 

Businesses are increasingly turning to freelancers and contractors in lieu of full-time employees. 

Businesses are using this strategy because they save money and get the best talent for their needs. With the rise of technology, many top professionals are finding it is easier to work remotely. Thanks to the internet, you can have any person you want on call with the exact skills needed for your company.

As more companies adopt this strategy, the need to develop best practices for hiring remote workers will become even more important. In addition, the best practices will change as the workforce changes in these swiftly evolving times. At GreenLight, our mission is to keep you informed of your responsibility as an employer and to support you in providing your employees and contractors with a reliable, seamless payment experience.

In this article, we’ll examine four best practices you should consider for hiring contractors and remote workers in 2021.

1. Invest in Human Resources Tech for Safety and Inclusivity

Technology is revolutionizing how companies and their employees communicate with one another, which has been a big improvement in many ways. Technological advancements are only speeding up in 2021, and businesses will have to integrate them to keep up.

Remote work is not only shaking up people’s lives, but it’s changing the very foundations of what is possible for businesses. Human resources and hiring has changed forever due to the rise of remote work, and so has the technology that supports these changes.

Blockchain and artificial intelligence are now used to make hiring decisions, which allows companies to be more inclusive about who they bring on board for remote work opportunities.

The use of AI in hiring can get you the worker you want without having to worry about government agencies and biases.

GreenLight uses AI to effectively determine the correct worker classification – and we either make them an employee of GreenLight, or we contract with them as an approved contractor. 

The future of work is here. When you allow new human resources technology to do the heavy-lifting for your business, you are able to hire a diverse set of contractors and remote workers in a fraction of the time with compliance guaranteed.

2. Ditch Antiquated Staffing Companies

Deciding where to hire freelancers, contractors and gig workers can be difficult. With so many options out there, you don’t want to waste time on employees who don’t meet your standards.

The traditional staffing agency model is broken. 

“It is time for a change. Our industry needs to start separating recruitment and employment,” says Chuang in The Broken Business Model of Staffing Agencies. 

If you’re one of the many companies that has been burned by these agencies, it’s time to try something different. It’s a whole new world for employers and employees alike, now that the internet has given everyone an equal opportunity to find jobs and apply for them. 

Top talent is out there ready to be hired. A good way to find remote workers is through a freelancing platform like Toptal or Upwork; these platforms quickly match you with quality professionals for all your hiring needs.

In 2021, you can find the right people and hire them the right way without a staffing agency.

With the addition of an API compliance layer like GreenLight safely managing your contingent workforce, you can hire and pay top talent safely, effectively, and efficiently.

To learn more about the best places to hire freelancers, contractors, and gig workers, click here to check out one of our recent articles where we do a deep dive into today’s top choices.

3. Utilize Cybersecurity Tools

Cybersecurity has become a major concern for businesses, and it’s important to use the right tools when hiring to avoid security breaches.

While many people think cybersecurity is only an issue in tech companies, that couldn’t be further from the truth. When hiring remote workers, one of the best ways to avoid cybersecurity breaches is identity verification. People will make profiles with someone else’s identity, and this can be both costly and threatening to any business.

The internet is full of people who are waiting for any opportunity to take advantage of your remote workforce. 

According to Varonis, the average cost of a data breach is $3.86 million as of 2020; and in their 2021 predictions they state, “Remote workers will continue to be a target for cybercriminals. As a side effect of remote workforces, cloud breaches will increase.”

Don’t make your company a target by hiring without cybersecurity tools in place such as background checks through AI-powered Checkr. GreenLight accommodates a seamless plug-in to industry leading systems, like Checkr, in order to keep your technical workflow running smoothly and safely.

4. Avoid Misclassification at All Costs

Employee classification debates have grown over the years, and 2021 promises the conversation won’t slow down any time soon. In 2021, knowing the difference between an independent contractor and an employee is vital knowledge that could save you from huge fines and committing a federal crime.

The government is taking an uncompromising view on the issue of employee misclassification. 

The Biden Administration has taken a firm stance on misclassification by announcing in the Empower Workers platform that they will “aggressively pursue employers who violate labor laws, participate in wage theft, or cheat on their taxes by intentionally misclassifying employees as independent contractors.”

On President Biden’s first day in office, he froze the Department of Labor’s Final Rule on independent contractor classification. This ruling set forth to settle the inquiry about what makes an employee dependent on the organization or business for work and what makes an employee work for themselves (and be classified as an independent contractor).

He plans to instead work with Congress to create a set of regulations, or a classification model, based on California’s ABC test. The Final Rule states that the ABC test is too strict, and this is why it has been frozen and will likely dissolve.

Your best bet for avoiding misclassification is to make sure your independent contractors pass the ABC test. Read our in-depth explanation of the ABC test here.

Helping you avoid misclassification is GreenLight’s specialty. We provide the technology and resources needed to ensure that your hiring workflow is legal and workers are always paid reliably, seamlessly, and on time.

Book a demo to speak with GreenLight’s team of experts about how we can help you automate your workflow so that you can focus on growing your business!

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Alex Steeno

Alex Steeno

Senior industry analyst, adviser of multiple hypergrowth agencies, SaaS, and tech-enabled service platforms, Alex Steeno regularly contributes insights related to industry trends, growth marketing, and management consulting.

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