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Today's New Worker, Down-home, Upscale, At Your Service

There is a growing contingent in the American work force, and its members answer to many names: consultant, freelancer, independent contractor, self-employed. They even coin new titles for themselves: "soloist" and "virtual employee" are two that keep cropping up.

Of the 24 million Americans now working on their own, 12 million are working at home and offering the services that they once performed for corporate business. Self-employment job growth increased double the rate of general job growth during recent years, and signs are that this rate will stay on the rise. Workplace technology makes it easier than ever to work from home. Faxes, mobile phones, modems, inexpensive copiers, and user-friendly PCs make the home worker only a beep away from the heart of the outside business world.

Large companies are picking up on this trend and using it to their advantage. Midsized and small businesses should consider doing the same. There are some compelling arguments for hiring workers--by the hour or by the job--to do at home what they formerly did in a company office . . . maybe even your own.

What does the New Worker do?

Today's at-home worker runs the job gamut, but here are a few of the areas with the heaviest at-home populations:

  • Computer experts
  • Graphic and product designers
  • Copywriters
  • Bookkeepers and accountants
  • Facilitators (for personnel and other "people" issues)
  • Marketing and management consultants
  • Word-processing operators
  • Telephone answering services
  • Telemarketers

How the New Worker can work for you:

  1. Flexibility. Home workers have given up the regularity of a nine-to-five schedule to have more control over their schedule, working around family needs and personal preferences . . . and fitting in jobs from key clients. From the client company's perspective, this working flexibility can also mean availability. If you have a rush job that crops up on Friday and must be in-hand by Monday, the free agent is more likely to say yes than the regular employee who is less accustomed to weekend toil.

  2. Personal Attention. Even if your business is small, you can feel you're getting special treatment from the outside worker who has the freedom to make decisions. You're dealing with the boss and not with the assistant-to-the-assistant, who may put you on permanent hold. When you buy the time of a soloist, you get focus, initiative, and results.

  3. Quality. Free agents often have left the regular workforce to pursue areas where they feel their real interests, talents, and abilities lie. As a result, these workers are not only fulfilled and enthusiastic, they are also offering clients their highest caliber of work. In many cases, you'll be getting the benefit of the independent worker's long experience with a larger company, which means you'll also get the big ideas and expertise that once only the corporate world could afford.

  4. Dependability. Independent contractors have no employee agreement promising to be faithful and responsible workers, but chances are they will be anyway. Most soloists find that the best way to sell themselves is through word-of-mouth. If you are happy, you will pass the word, and building a family of satisfied clients is the free agent's best advertising. Mistakes are more likely to be rectified--and avoided in the future--by the worker who does not have the security of the "goof-proof" salary.

  5. Reasonable Cost. Since the solo contractor has no employees and no overhead, some of these workers can afford to charge less for their services or products. The exceptions, of course, are the highly-trained consultants and former managers who still expect to snag top fees. However, even when the charge is high, remember that you are paying only for exactly what you need, when you need it. A little "luxury" can go a long way, especially if you're looking for quality work--the right computer system, the convincing sales brochure--that can make a big difference to your business. And last, but certainly not least, keep in mind that independent workers are not entitled to any of your company benefits.

Be sure "your" New Worker doesn't really belong to you.

No matter by what name they call themselves, the New Worker is not an employee. Sometimes the line between independent and employee status gets scuffed in the dust, and the IRS keeps drawing it over again. State tax auditors are also taking a new, hard look at companies whose independents look more like "the real thing." To head off problems, the first thing you should do is have each free agent complete a 1099 form. Once the basic paperwork is on file, consult your company accountant and attorney about each independent contractor situation. And then--there are still those "Twenty Questions" established by the IRS to keep in mind as work progresses. Consult your accountant or your local SBA office for a complete list of these important guidelines.

As a quick rule of thumb, here's a nutshell version of the 20 guidelines to keep in mind:

  • Encourage (or at least allow) the worker to provide his own assistants, including their hiring, supervision, and compensation.
  • Allow workers to establish their own schedule of work days/hours.
  • Be sure that workers provide their own equipment and most supplies.
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