Contractors holding you back? We helped this UK company take control in the USA
A UK firm offering quality assurance services to pharmaceutical companies in more than 70 countries had begun to make significant inroads into the USA. But employing US workers was posing a challenge…
The dilemma: hiring independent contractors in the USA was becoming bad for business
The company urgently needed workers on the ground in the US and was able to meet its business development needs quickly by using independent US contractors. This worked well at the beginning, but as the business grew the benefits diminished. Using contractors soon became:
- expensive – contractors typically charged more and there was a risk of having to pay tax to use them
- unreliable – contractors were not always available when they were needed
- unsustainable – clients preferred to work with dedicated employees and the contractors wanted to access employee benefits
The solution: hire permanent staff in the US
We made it easy for the company to hire US employees, by taking away the obstacles that had previously first steered them towards contractors. Our support included writing customised offer letters; speaking directly to job seekers about salaries and benefits; hiring the workers, and then managing the payroll, taxes and benefits.
The outcome: business grew
In this way we enabled the company to employ three American workers quickly without having to depend on independent contractors. The company was able to concentrate on expanding, rather than being bogged down by demands such as payroll, taxes and healthcare plans. The US business has since grown, with plans to have more Foothold America employees in the future.
The client said…
“By using Foothold America we were able to take on full-time staff quickly and then add new people to work on a large US contract. Although we’ve set up our legal entity in the US, we’ve delayed hiring staff through it because of the complexities of employing staff in the US. Foothold America gives us flexibility and value as we continue to expand our US operations. We’re delighted with the service and would highly recommend them.”
Independent contractors – a quick fix that can quickly go wrong
- Less control. Independent contractors by definition are “independent” of your control.
- Transient workers. Contractors don’t know your business or your clients as well as employees and have less loyalty.
- Risk of government audits. Misclassification lawsuits against employers are increasing.
- Injuries on the job. While employees are covered by workers’ compensation insurance, independent contractors are not.
- Copyright issues. Contractors who develop written material, photos, or software code are generally owners of the product unless your agreement says otherwise.
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