"In my mind, there is no independent contractor versus employee. There is a job to be done, and the right tool for it."
A question I get all the time is: when should a company use an independent contractor instead of a regular/FTE hire? People want a clean rule, something they can write into a policy and apply. I do not think a rule is the right way to look at it, and I want to explain why.
Independent contractors are a different kind of talent
First, what an independent contractor actually is. These are people who work with multiple businesses, day in and day out. They train themselves constantly because their next engagement depends on it. And they sit right at the edge of the new technologies. You can see it clearly right now with AI and large language models, where many independent contractors picked it up well ahead of the full-time market because they were already using these tools across several clients while everyone else was still in endless meetings discussing if a tool should be used or not.
So when you hire an independent contractor, you often get a skill set that is not available to you as a full-time employee. Not because you could not recruit it eventually, but because the person on that edge often does not want a permanent seat. They want the variety and the autonomy of contracting. Say a VP of marketing wants to stand up a new capability built on large language models. The specialist who has already built that three times this year is far more likely to be an independent contractor than someone sitting in your full-time pipeline.
There is also the shape of the work. Some projects have a clear start and a clear end. For those, a contractor can simply be the better fit. Not as a cost trick, but because the engagement matches the work.
Why a rule is the wrong frame
In my mind, there is no independent contractor versus employee.. It is an optimization exercise. For every single job to be done, the company needs to understand what is best. Independent contractor. Employee. Temporary worker through staff augmentation. Agent of record. Employer of record. Something for a quarter, something for another.
Think of all those engagement models as a toolkit for achieving your goals. Each one is a tool. The job picks the tool, not the other way around. A company that defaults to the same model is using one tool for every job, and that is how you end up with the wrong fit on both ends. You pay for stability you do not need, or you miss the specialist youneed because your only setting was full-time.
And yes, there is a layer that sits on top of all of this, which is whether the rules in a given place support the engagement you have in mind. That is real, and it deserves its own edition. But the strategic call comes first. Decide what the job needs, pick the tool, making sure you can do it compliantly. Do not let the toolkit you happen to have decide what work you are willing to take on.
So look at how your teams engage contingent talent today. Are they picking the model job by job, based on the work? Or has one model quietly become the default that everything gets forced into, whether it fits or not?
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Author
Ernesto Lamaina
GM, Lifted
Ernesto Lamaina is the General Manager of Lifted, an Upwork company dedicated to helping enterprises source, engage, and manage contingent talent across every contract type—independent contractors, staff augmentation, employer of record, and managed services.
