AS the job market gets more competitive, companies are finding it increasingly difficult to find and retain the high-quality employees they need. To address this challenge, many organisations are turning to a strategic approach - hiring independent contractors. This shift in workforce strategy allows businesses to tap into a larger talent pool, quickly fill important positions and stay flexible in their operations.

Today, companies in Singapore are no longer limited to local contractors. They can remotely hire contractors from around the region and the world. This has opened up new opportunities for accessing specialized skills and expertise that may not be readily available locally. According to a recent Remote-sponsored report by research house IDC, more than half of small and medium-sized businesses (SMBs) surveyed in Singapore plan to hire 20 to 30 per cent contractors who live outside the borders in the next 12 months.

To help companies manage contractors efficiently and with a peace of mind, Remote, which helps companies hire, manage and pay their globally distributed workforces, recently introduced its Global HR Platform.

The new platform is aimed at helping companies and individuals to leverage the opportunities of the global economy by hiring talent across borders and managing distributed workforces. Remote helps its customers to do all that by integrating their HR needs in one convenient platform that is compliant with relevant laws and regulations. For instance, Remote's Contractor Management platform, helps companies simplify the process of overseeing both international and domestic contractors by offering automated onboarding, invoicing and ensuring adherence to tax compliance requirements.

Pedro Monteiro de Barros, senior vice president and general manager for contractors at Remote, answers some questions about hiring independent contractors and how to manage them effectively.

Q: How does hiring someone as an independent contractor differ from hiring them as a full-time employee (FTE)?

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A: An independent contractor is like a specialised vendor that a company hires to accomplish a specific task or project. They are experts in their fields and commit their time to help the company achieve a particular objective. Unlike employees, who are integrated into the company's payroll and organisational structure, contractors are part of the contingent workforce - they work for the company for a defined period and are not permanently embedded in the company's operations.

It allows companies to tap into a global workforce, for example they can hire an independent contractor that is based in the US or the Philippines.

Therefore, it's a balancing act between what's essential for ongoing operations and the long-term success of the company versus the specific skills needed for a defined period.

Q: How can hiring independent contractors be cost-effective for companies in Singapore?

A: In Singapore, companies can reap the benefits of flexibility and cost-efficiency by engaging independent contractors. For example, in creative fields like advertising and marketing, where specialised skills are required for short-term projects, companies can swiftly access the necessary talent by utilising contractors. These contractors can immediately contribute to specific projects, enhancing business agility and competitiveness, all without incurring the expenses associated with recruiting, hiring and training full-time employees for the same tasks. This is especially so in the tech industry which puts a premium on speed and agility. Tech firms can tap into contractors for not only creative tasks but also technical, engineering, finance, and more.

Moreover, when working with independent contractors, they bear the responsibility for their own benefits, such as health insurance or retirement plans. This will effectively mitigate the legal and financial repercussions that employers might incur for non-compliance with statutory benefits outlined in local and national labor laws.

Q: What is the main risk that companies need to be mindful of when hiring independent contractors?

A: Classifying workers correctly can be complex, particularly when hiring contractors across borders, as laws are different in each country and as regulations are evolving.

For example, misclassification can occur when a full-time remote employee is classed as an independent contractor. It is worth noting that a remote worker doesn't necessarily qualify as an independent contractor simply because they are based in another country, or that they are working from home. Contractors are their own legal entities in most countries, which entitles them to certain rights, such as deciding the number of hours they work for, the possibility to work for multiple clients, the right to manage the work they perform, and the right to get paid in a method and frequency of their choice.

When misclassification happens, workers may be deprived of employment rights and benefits according to local labour laws and regulations, and may not be paying the correct employment taxes due. As such, governments are stepping up enforcement, raising penalties and tightening laws. Companies may face consequences, even if misclassification was unintentional.

Q: How can companies minimise the risks related to misclassification of contractors?

A: Companies can partner with an experienced firm like Remote for contractor management to minimise the risks related to incorrect classification of contractors. Remote's teams of legal experts ensure that contractor agreements are compliant with local laws wherever they are hired. Companies can also use Remote's free employee misclassification risk calculator to find out their risk level and what they can do to fix it. When reclassification is needed, Remote enables companies to easily convert the person into a full-time employee, and set up payroll and benefits. In addition, Remote offers a misclassification advisory service aimed at assisting companies in evaluating and mitigating the risks to help them stay compliant.

Remote's contractor management platform can help companies onboard, manage and pay contractors in more than 180 countries. The service covers essential tasks such as creating locally compliant contracts, handling invoices and ensuring timely payments.

Under Remote's Fair Price guarantee, companies only pay a monthly fee of US$29 per active contractor on the platform.

Streamline your global hiring with independent contractors - easily and compliantly. Discover the Remote advantage today.

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