Hiring an Entrepreneur Who is Taking a Second “Job”
How many of you in HR have recently interviewed individuals who operate their own small business but are looking for a second job to supplement their income until the economy picks up again? These are true independent contractors, who normally wouldn’t work for someone else, but hey, times are tough and they’re flexible. They have bills to pay and kids to feed.
They are hard working, creative and talented. They have to be to survive on their own even during reasonably good economic times. Now they want to apply their skills to working in your company. So you reason, “This person will be a great asset to our company.”
Let’s take a step back and have a closer look at the situation
Don’t get me wrong. These self starters can be a valuable addition to your team if they fit the profile your company needs. However, I can think of a few questions to ponder when considering them.
1. Are they independent contractors? Just because the person has a business of his/her own does not guarantee he/she will be an independent contractor while working for you. It is very possible for someone to “step outside his own business” and work for you as an employee. It is easier than you think to get caught up in the logic of “This guy has his own business, so I’ll bring him in. He does the work I need and I can pay him as an IC. It’s the best of both worlds for me…”
To be a bona fide IC he must still meet all the same common law standards of any IC. You should be cautious even if you pay him through his own corporation. By definition, the president of a corporation is an employee. If he is incorporated his own corporation should be properly handling his wages. Beware of the person who is the president of his own corporation and tells you he is an IC. He could be a risk to you sometime in the future.
2. Are they team players? Many times these entrepreneurs are tough individualists. They may have set ideas how things should be done. Also their “moonlighting” at your company may hurt their focus or impede their own business’ growth. They may begin to resent the distraction and look for a fast bale out. Also, while they are working for you be careful they aren’t also looking for their own business contacts.
3. Are they committed heart and soul? The question is will they immerse themselves in your company’s success for the long term? The goal for most of these entrepreneurs is to bring in enough money until their own business picks up. They are looking for alternate sources of income to make ends meet. They may stay a long time and provide you with an abundance of value, or they may only be looking to ride out the storm. If it’s the latter they could bale out just as they become valuable to you.
I’m not advising against bringing these talented people into your company - just be cautious.
And of course, if you bring them onboard as an IC, be sure you properly classify them and then document your decision.
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