As entrepreneurs in their own right, independent contractors relish in the freedom of owning their own business. In fact, that’s likely what motivated them to launch their own business in the first place.

However, to somewhat formalize this freedom, many independent contractors engage with Portable Employers of Record (PER). A PER can be described as a traditional office - with the support of departments such as a contracts department, finance group, a human resources department, a payroll team, benefits managers, collections agents, etc. — that helps an independent contractor as he or she moves from client to client. Either becoming a PER or engaging with one can produce myriad benefits. The important piece is to clarify your goals as either a business or independent contractor and ensure those goals closely align with the purpose and processes of PERs.

We’ve developed a short guide that outlines PERs and the benefits for both businesses and individuals.

Benefits of PERs for Businesses
Simply put, PERs can engage independent contractors directly. PERs enable companies to build their own talent pools of contract workers that they can draw from as needed and reengage individuals already familiar with their organization.

There are numerous potential benefits for businesses to become PERs, including:

• Cost savings: Hiring independent contractors directly can be much less expensive than acquiring the same contractors through staffing agencies.
• Streamlined services: Businesses can augment the efficiency of their services supply chains by connecting directly with the worker whom businesses commonly use, rather than going through multiple consulting companies that serve as sub-contractors.
• Fast talent deployment: Shortened recruitment cycles mean increased productivity.
• Control and visibility: a corporate commitment to direct contractor engagement promotes enterprise-wide process consistencies, which ultimately leads to better visibility into expenditures for services.

Benefits of PERs for Independent Contractors
A major benefit of a PER to an independent contractor is that it helps an individual maintain a single employer from client to client. Furthermore, a PER does not tell an individual what to do, but is able to manage daily business requirements. In fact, maintaining a single employer from client to client can render significant benefits, including:

• Reduced taxes: Rather than paying unemployment and Social Security taxes twice or more each year (which occurs every time independent contractors start with a new employer), they will only pay once, and they lower these tax payments by reaching their maximum cap more quickly.
• Uninterrupted benefits: Independent contractors may have the opportunity to reap consistent benefits, like health insurance, by remaining with one employer, rather than by themselves. These are benefits that a 1099 consultant can not receive. Similarly, individuals can take the “employer” with them without a break in business services or benefits.
• The ability to secure loans: Simply put, it’s much easier for independent contractors that are engaged with PERs to secure loans. Banks approach loan applications from individuals more favorably that have consistent work history and a single employer.

Not sure if becoming or engaging with a PER is right for you? For further reading, visit http://en.wikipedia.org/wiki/Portable_Employer_of_Record.

Also consult your financial planning or tax professional for more information specific to your situation. Other informative sites that provide information about PER services include:

• http://www.humancapitalinstitute.org/hci/hci.home
• http://www.mybizoffice.com
• http://www.bbuffalo.com
• http://www.w2wventures.com
• http://www.iamindependent.biz
• http://www.thealbanygroup.com/usa

Related posts:

1. Guidelines for Hiring an Independent Contractor
2. Eight Great Resources Offered by the IRS
3. Health Insurance for the Small Business Owner
4. Getting the Business Insurance You Need