7 Things to Consider When Hiring an IT Consultant

Are you considering hiring an IT consultant for that challenging project or new piece of equipment? These tips will help you know the questions to ask regarding legal issues and how to avoid common mistakes that companies make when bringing in outside help.

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Wed, November 07, 2012

CIO — Hiring an IT consultant for a mission-critical task or project that drives core business sometimes is more cost- and time-efficient than hiring a full-time employee that you can train, work with and guide. These specialized IT pros are normally brought in to work on critical, deadline-driven tasks, making it an imperative that you find the right IT consultant for the job. However, it is a tricky-and potentially risky--endeavor, but there are steps you can take to ensure the job gets done while minimizing the legal risks to your company.

Editor's note: This article is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice regarding specific issues.

There a number of reasons you may need an IT consultant including training on a new piece of software, equipment or technology. Maybe you need an unbiased review of internal procedures or SEO. Regardless of the reason, finding the right consultant can mean the difference between success or failure. Add to that the legalities involved and it's easy to see how challenging this task can be.

So where do you start? CIO.com spoke with Michael Chrusch, senior vice president, general counsel & corporate secretary to Signature Consultants, to gain insight into the seven common mistakes to avoid when hiring an IT consultant.

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1. IT Staff Employee or Consultant?

One of the first things you must decide when hiring consultants is what their employment status will be. "Two of the most common legal issues when hiring IT consultants arise in connection with understanding the consultant's employment status and in dealing with the concept of co-employment," says Chrusch.

It's critical for companies to correctly determine whether the IT consultants are employees or independent contractors of the employer. For a regular employee, of course, you need to withhold federal and state taxes, pay Social Security and Medicare contributions, pay unemployment taxes, and so on, but an independent contractor, on the other hand, doesn't require any of that.

"In determining whether the IT consultant providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered," says Chrusch.

If you are using an IT staffing service then they can help you make the determination, but if your HR department makes the call, here are some tips from Chrusch that can help you decide.

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