Why Independent Contractors Are Good for Business

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BirdsAllow me to editorialize for a bit: I was pretty bummed when the whole Zirtual debacle went down a couple of weeks ago.

For starters, I have a few friends who worked as virtual assistants at the company, and it was upsetting to see them taking to social media, wondering aloud if anyone had any job opportunities for them.

I was also, in a way, rooting for Zirtual. I’ve worked with Maren Kate Donovan for a number of stories in the past, and she’s always been a whip-smart, insightful, and genuine person — the kind of person whose business you want to succeed simply for their sake.

And then there was the fact that Zirtual hired its assistants as full-time employees, which to me was a powerful statement. In an economy that increasingly tends toward gig labor and contingent work, here was a company that chose instead to value its employees as people and strived to take care of them.

“I’ve spoken to hundreds of employees of Zirtual by this point and I’ve never seen a company culture with so much love for its mission and purpose,” wrote Wil Schroter, CEO of Startups.co and the man who “saved” Zirtual, in a post on Quora.

To me, that’s proof that Zirtual’s full-time employment model was implemented with employees in mind, and I wish more companies would follow that lead.

All that being said, I do have to point out that some have speculated that Zirtual’s full-time employment model contributed to the company’s semi-death. That’s not enough to make me totally rethink the value of full-time employment in today’s economic climate, but it is reason to stop and consider the benefits that employees and companies might receive from alternative employment models.

I’m wary of the sharing economy, because I think it gives unscrupulous companies an excuse to shift more risk onto the shoulders of their pseudo-employees. But I also recognize that, deployed responsibly, an independent contractor model can be a reasonable, successful way to run a business — and it can be a lucrative way to make a living for the contractors themselves.

WalkNot every company hiring independent contractors is doing so in order to exploit the labor force. In fact, some companies are hiring independent contractors because it makes sense for them, their clients, and their workers.

To learn more about the benefits of hiring independent contractors , I spoke to Lisa Zeeveld, CFO of virtual assistant company eaHELP.

Unlike Zirtual, eaHELP hires its virtual assistants as independent contractors, hence why I felt Zeeveld would be a great source for this article. Note that what follows is not, in any way, an attack on Zirtual’s employment model, nor is it meant to be “proof” that independent contractors are the way to go. Rather, what follows is simply a guide  to why some companies hire independent contractors.

Why Independent Contractors Are Good for Business

“For us, [independent contractors] have always made sense,” Zeeveld says. “We created this company to have an arm’s-length relationship with our clients and our [virtual assistants].”

According to Zeeveld, eaHELP finds that its virtual assistants, or VAs, want freedom and flexibility. They want to have a lot of different partnerships with different clients and organizations. VAs, Zeeveld says, can’t find this sort of freedom under the traditional W-2 model — but they can find it as independent contractors.

Similarly, Zeeveld notes that hiring VAs as independent contractors, instead of as full-time employees, gives eaHELP it’s own freedom and flexibility, which is necessary for the company’s continued well-being.

“It comes down to scalability,” Zeeveld says. “We wanted to make sure that, if our client roster dropped or grew, we had the flexibility to bring on VAs or end partnerships with VAs as needed. That’s why we continue to have that [independent contractor] model: flexibility for the VAs and for us.”

Furthermore, Zeeveld believes that clients benefit from the independent contractor status of eaHELP’s VAs as well.

“When [CEO] Bryan [Miles] and [President] Tricia [Sciortino] started eaHELP, it was in a down economy,” Zeeveld explains. “People were looking for a way to have the same level of service they had before, but in a more affordable way.”

GrapesZeeveld says she and the founders of eaHELp began to think about employee burden costs — that is, what it costs to have somebody sitting in an office for 40 hours a week, vs. what it costs to hire someone “in segments to do the work you need to get done.”

“This was the model our clients were looking for,” Zeeveld says. “They didn’t need someone to work in the office for 40 hours a week. They just needed somebody for 5, 10, maybe 20 hours.”

By hiring VAs as independent contractors, eaHELP could give its clients the model they needed without shouldering unnecessary labor costs. It was a win-win situation, cost-effective for both clients and eaHELP.

Zeeveld says that eaHELP also found that VAs were more productive when hired specifically to do 5 or 10 hours’ worth of work, rather than hired on full-time.

“There wasn’t much water-cooler talk,” Zeeveld says. “The [VAs] were hired to sit in the office for five or so hours at a time and do work, and that’s what they did.”

Ultimately, it seems that hiring independent contractors can be a great way for companies, their clients, and the contractors themselves to partake in a mutually beneficial relationship, one that offers everyone involved healthy amounts of freedom and flexibility.

But how can independent contractors be sure that they’re working with the right companies? How can independent contractors make sure their business partners don’t take advantage of them? Check out “Who Should You Work With? A Guide for Independent Contractors,” where Zeeveld shares her tips on how independent contractors can protect themselves and find great work opportunities.

By Matthew Kosinski