Tips for Making Your First Part-Time or Contract Hire

There comes a moment for every business owner when they realize they need extra help. Often, this comes before you’re ready to make a full-time hire. A full-time hire can be a significant investment, and if you’re still expanding your organization, you may not be ready to pay for a full-time salary, benefits, and more. 

Luckily, there is the option to hire help part-time, or to make a contract hire. These hires can expand your brand without you having the responsibility of being someone’s sole source of income. Plus, a new perspective and extra set of hands can be like a breath of fresh air for your business. 

Here are some tips for nailing your first part-time or contract hire. 

Determine the Need for Your First Hire

Contract and part-time employees can be great for completing specific projects with fewer overhead costs. But how do you know if you’re really ready to make your first hire?

Here are some questions to ask yourself:

• Are you turning away orders because you can’t do them all on your own?
• Do you anticipate a jump in sales with a new product or service?
• Do you need a unique skill that’s outside of your wheelhouse?
• Do you have enough savings to pay someone for 30 to 90 days?
• Do you have major seasonal swings where an extra set of hands would go a long way? 

If you answered yes to any of these questions, it’s likely a good time for you to make a part-time or contract hire.

What are the benefits of hiring a part-time or contract employee?

The benefits of hiring a part-time or contract employee include:

• Increased productivity and efficiency with an extra set of hands to take on tasks.
• As the leader, you’ll be able to focus on core business activities and strategic planning.
• Increase cost savings due to lower salary, benefits, and overhead costs compared to full-time employees.
• Flexibility to adjust hours based on workload and business needs.
• Access to specialized skills for specific tasks or projects without long-term commitments.
• Only pay for the work needed without long-term financial commitments.
• Flexibility to scale the workforce up or down quickly based on project demands.
• Less administrative work related to payroll, taxes, and compliance, often handled by the contractor or their agency.
• Opportunity to evaluate a worker’s performance before possibly offering a full-time position.

Defining the Role and Responsibilities

Next, determine who you should hire. 

Identify gaps in your business to determine what kind of hire you need. Assess your current workload and take note of which tasks could be delegated. 

Some of these tasks will be specialized, like posting to social media or a lab tech. Others will be more general, like packing and sending orders. This will help you determine what kind of hire you need to make. 

A temp or a part-time hire can often help you complete more general tasks. An intern may come in with no experience, and require additional training to ramp up. A contract hire is ideal for specialized tasks when you need someone to hit the ground running. 

Use the gaps that you need filled to write a clear job description to find candidates that are interested in the role and that will be a good fit for your organization. An unclear job description means you could make a mismatched hire, which can be an expensive mistake and take more of your time than you doing the tasks they’re taking over. 

Your job description should be clear and concise, outlining key responsibilities, required skills, and qualifications. 

Preparing Your Business for a New Hire

While there are some things you’ll need to do for either type of hire, contractors and part-time hires have different ways you’ll need to prepare your business.

Preparation for Any Hiring

There are some things you’ll need to do regardless if you’re hiring an intern or a full-time employee. 

1. Apply for an employee identification number (EIN) by filling out an SS-4 form on the IRS’ website. 
2. Calculate what you can afford and save up to cover hiring expenses. For all new hires, this will include recruiting, training, and 30 to 90 days worth of wages. 
3. Organize your operations to ensure your processes and systems are in place and documented. This will help with onboarding. 
4. Outline your expectations, which should include goals, key performance indicators (KPIs), and performance metrics. 
5. Note your business cultures and values that will help your new hire get a better understanding of your organization.  
6. Prepare to file an IRS Form 940 each year if you pay $1,500 or more in wages in any quarter in which an employee worked for you in any 20 or more different weeks of the year. 

Preparation for Part-Time Hires

If you want to hire a part-time employee, be prepared to fill out more paperwork and do a little extra work before their arrival compared to a contract employee. 

1. Register your company with your state labor department.
2. Buy workers’ compensation insurance. 
3. Set up a payroll tax withholding system for federal and sometimes state taxes. You’ll need to make monthly payments to the IRS and state tax board. 
4. Print out any Department of Labor posters that apply to your employees. 

While it’s a good idea to set aside 30 to 90 days worth of payments, you’ll need to set more aside than that. Some other expenses worth budgeting for include new equipment (computer, work station, etc), social security taxes, training resources, recruiting, onboarding, medicare taxes, and payroll taxes.

Preparation for a Contractor

Hiring a contractor is often much simpler, because the contractor or the agency you’re working with does a lot of the paperwork and preparation for you. To bring on a contractor, the main paperwork you’ll need is a W-9 for tax filing. 

If the contractor doesn’t have a contract, you’ll need to find one. Review their contracts meticulously before signing to make sure there are no hidden fees or issues. 

You also won’t have to save as much because contractors are more likely to have their own equipment, like a computer, camera, or subscriptions to certain software programs. 

Some other things you won’t have to worry about with a contract hire: Medicare tax, payroll tax, or unemployment tax. 

The Hiring Process

The hiring process is split into three parts: Crafting the job posting, screening, and interviewing candidates. 

Crafting the Job Post

It’s important to write a great job description. A bad description pulls in unfit candidates and can reduce the visibility of your job posting online. 

Don’t make your job post too lengthy. Only include necessary information like:

• Title
• Duties and responsibilities
• Working conditions (environmental, physical demands, travel requirements)
• Pay range (optional, but always a good idea to make sure you get aligned candidates)
• Required qualifications, skills, experience
• Company information

Providing a thorough, yet concise job post helps candidates understand if they’re qualified for the position, as well as the benefits of taking on the role. Try to avoid jargon and use neutral wording to avoid biases. 

Once you’re ready, you can share your job description on online job boards, your social media, industry specific forums, in your professional circles, and at local community centers. It’s always smart to share your job listing in at least two places to bring in a diverse range of candidates. 

If no one is applying to your job, consider comparing your pay to similar jobs. You may want to increase what you pay if it’s easy for someone to find a similar job at a better rate. You can also streamline your interview process. You’ll likely lose interested folks if it takes you months to make a hire. 

On the other hand, if you have too many people applying, consider hiding secret directions to find out who’s taking the job seriously. Or, give applicants a short test project or case study. 

Screening Candidates

Develop a screening process to determine which candidates you’d like to interview. This includes checking their resume, cover letter, or CV for the necessary qualifications and professionalism. 

Formatting, spelling, grammar errors, and informational inconsistencies can be a sign of a lack of attention to detail or that they’re mass applying to jobs. Yet, don’t be too hard on your applicants. You may have someone in your pile of options that would thrive in your role with some minor accommodations. 

Pro-Tip: It is illegal to look up candidates online as part of the initial screening. Wait until after the interview to avoid accessing protected information like sex, race, and nationality. 

Despite the fact you’ve spent time outlining a list of requirements, it’s always a good idea to look for potential in a candidate. Sometimes, interest or passion will improve your organization more than a great track record. 

Consider hosting 30-minute phone screenings to go over qualifications and job details with interested candidates. This helps you avoid wasting time on a candidate who doesn’t like your job offer, or that isn’t serious about the position. 

Interviewing Candidates

Once you’re done phone screening applicants you can interview people virtually or in person. Ask about their career goals, skills, experience, strengths, weaknesses and accomplishments. This can help you determine if their life experiences are a good fit for the role, and the culture you’re hoping to build at your company. 

Still stuck between multiple candidates? Ask them to complete a test project. It’s easy to say the right things in an interview, but harder to deliver an exceptional test project without experience. While not required, it’s a nice gesture to pay them for their time to do these projects, as a motivated candidate may spend multiple hours on a task like this. 

Last, conduct a thorough reference check. Again, this should be your last step to avoid a discrimination lawsuit. 

Drafting the Offer Letter

Once you’ve found your ideal part-time or contract hire, it’s time to send them an offer letter. In it, you’ll want to include:

• Their name
• Job title
• Supervisor
• Pay rate
• Start date
• Duties
• Job classification
• If relevant, a schedule and probationary period 

Make sure you’re clear on what their responsibilities are and set realistic timelines and expectations to set them up for success on day one.

Once they accept your offer letter, send out a rejection to anyone who didn’t make the cut this time. You can also hold onto applicants that you might be interested in hiring one day to expedite this process in the future. 

For contract workers, you’ll collect a W-9. For part time employees, you’ll collect an I-9 and report new hires to your state registry, if applicable. 

You’re Ready to Hire a Part-Time or Contract Employee

While it is a lot of work upfront to find a great part-time or contract employee, when you do find the right person, it can feel like adding a spark to your business. Things get done faster. You have more time for the parts of your business you love. And, you’ll be expanding your brand. 

The right part-time or contract hire is a win/win/win scenario. Plus, they may become a full-time hire one day.

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