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With brands like Chemist Warehouse under scrutiny for misclassifying employees and the Australian Labor government introducing hefty new fines with the Closing Loopholes Bill, you might think that hiring contractors could pose a legal risk for your business. However, the bigger risk would be missing out on the untapped talent on offer from contractors who often have specialised experiences and skills that can better your business.
The reality is that contracting as a professional choice is gaining popularity, particularly among highly skilled individuals such as copywriters, graphic designers, and developers. Data from the ABS shows that the number of Australians working as independent contractors is 1 million, accommodating 7.5 per cent of the employed, with many individuals opting for the chance at improved earning potential, schedule flexibility and remote working.
One of the key reasons for this shift is the changing priorities of younger generations. For Millennials and Gen Z, flexibility in work arrangements, particularly remote work, has become a crucial factor in work satisfaction. Contracting offers these individuals the opportunity to contribute to a diverse range of projects, enabling them to oversee work on their terms, leading to greater wellbeing and work/life balance.
Talent is everywhere
For companies, the ability to adapt to the evolving preferences of the workforce can give them a significant advantage over their competitors. Embracing the concept of contract labour opens up access to a diverse global talent pool; employers can find highly specialised professionals for specific projects, and the win-win situation for both companies and contractors lies in increased productivity and flexibility.
With companies operating in an increasingly global marketplace, speed and agility are now top priorities when hiring and onboarding talent. Depending on a company’s specific goals, working with contractors can present an attractive solution to address skills shortages, accommodate project-driven demands and be ready to respond quickly to unexpected strategy changes.
Avoiding misclassification
The shadow over contractors is further obscured by legislation, such as the Closing Loopholes Bill, which will put companies at risk of significant financial penalties up to $469,500 if they misclassify employees. As a result, companies may feel the need to overcorrect by avoiding working with any contractors at all.
Instead, the answer lies in being proactive about avoiding misclassifying staff as contractors when they work as de facto employees. This means understanding the proper classification of workforce and labour laws and working with their contractors to ensure a positive and compliant contractor-employer relationship that is mutually beneficial.
For businesses looking to harness the advantages of a global talent pool, embracing contractors in their workforce is a strategic move. The flexibility, agility, and fresh perspectives that contractors bring can invigorate a company's operations and keep them competitive in an ever-changing market.
Pedro Barros is the general manager, contractors at Remote.
