You can outsource complementary jobs that you cannot personally attend to. Learn here what you need to know.
This can be a good option in occasional situations when you cannot attend to a particular job or, more commonly, when you are unable to provide a service closely related to what you do.
Some examples:
- A building company takes on a project but it is unable to do care for certain aspects i.e plumbing, tiling etc. Rather than employing an electrician the company may choose to outsource these tasks to a self-employed plumber or tiler.
- A company outsources its social media management and customer services to a self-employed person or another company.
- You can outsource your invoicing, payment control or other paperwork to a remote assistant.
Nearly all activities can be outsourced to other companies or sole traders. However, in order to avoid problems, it is important to understand some fundamental differences between employing someone to do the job and outsourcing the work to another company or self-employed person.
Problems often result when this difference is not clearly understood or when one solution is chosen as a mere substitution of the other.
1. Make sure you hire someone who is fully registered.
The lawmaker puts the responsibility on you to check that the persons you hire is fulfilling all their obligations. This can put a certain amount liability on the contractor if an issue (such as a work inspection) reveals that the hired professional has no national insurance.
For this reason, if you hire the services of someone who is self-employed that will work from your premises, you have to request from him periodically a
sub-contractor certificate to make sure that he is fulfilling his obligations.
Beside the risks, you will not be able to include the costs in your books and reduce your tax liability if the person you hire is not fully registered. This brings upon you a hidden cost: You would have to add at least 20% to your costs under the concept of “un-saved” tax.
2. Make sure your are not treating him as an employee.
Some misinformed entrepreneurs hire the services of a sole trader or autonomo as a mere substitute of an employee simply because the social security costs of employing them are higher than “financing” the social security costs of the self-employed individual.
3. Write a contract.
The business relation with another company or autonomo is ruled by a “contract of service” rather than a “contract of employment”.
Related: Commercial Contract. Main Points
4. Know your responsibilities in Health and Safety.
If you need to use the services of someone external to work within your premises, you are responsible to advise him of any potential risks inherent to the activity or the workplace.
Remember that you are liable for any safety incident that may happen in your business.
Have everyone who joins your team to acknowledge in writing that they have read the internal policy. You can include this as a clause of the “commercial contract”.
Outsourcing will be a good solution if:
1. You do not have enough work to hire someone to do it regularly or for a reasonable price.
2. The performance of that job requires equipment that you do not have.
3. The team that you choose will handle the job without your close supervision.
Limit Consulting
