1. Legal Ramifications
One of the most important reasons to prioritize independent talent satisfaction is based in compliance. “Independent contractor” is a IRS-designated term, and independent contractors cannot be engaged or treated like traditional, W-2 employees. For example, independent contractors are free to determine when, where and how they work, whereas W-2 employees typically rely on a manager or boss to direct their work and tell them what to do.
Improperly classifying a worker as an independent contractor carries serious legal consequences. Misclassification can result in a company audit, negative press and loss of customer trust, as well as costly fines or penalties. If an independent contractor believes they should be classified as an employee, they may consider taking legal action against the company, alerting the IRS, or filing a form requesting classification determination.
Ensuring that workers are properly classified from the start — and then prioritizing their happiness — is not only good compliance practice, but it can also keep your company safe from these side effects of dissatisfaction.
2. The Ongoing War For Talent
Today’s candidate-driven market, coupled with a low unemployment rate and ongoing skills gap, means independent professionals have a choice in the clients they work with. Our research finds that 82% of independents say they have some or a lot of choice in picking their clients. Because this valuable pool of talent often has the upper hand, it is important for HR professionals to understand the requirements of independent talent and commit to creating a structure that meets these needs.
3. A Future Pipeline Of Talent
Just like unhappy employees will start looking for other jobs, independent talent who are dissatisfied or have a poor experience will be unlikely to return to the same company for future work. By prioritizing the needs of independent professionals and committing to maintaining strong relationships, companies can simplify reengagement by building a pool of skilled talent who will happily return for project opportunities in the future.