What is a contractor? Why are these professionals so crucial for clients?

    Alicia Edwards

    By Alicia Edwards
    July 19, 2023

    Updated
    February 3, 2026

    0 min read

    ContractorsWhat is a contractor?

    A contractor is a professional or an entity that provides a specific set of services to clients, often related to energy, engineering and infrastructure projects. The term can encompass a wide range of professions, such as software engineers, project managers, quality specialists and other technical experts that are needed on an interim basis.

    What is a 1099 contractor?

    A 1099 contractor is an independent, self‑employed professional who provides services to a business without being classified as an employee. They control how and when their work is completed, typically operate under their own business entity, and are responsible for managing their own taxes, insurance, and benefits. Businesses pay them per project or service, and these payments are reported to the IRS using Form 1099‑NEC, which is where the term originates.

    What is a contractor responsible for?

    These individuals or companies are responsible for planning, executing, and managing projects, ensuring that they are completed on time, within budget, and according to the client's requirements.


    What is contract work?

    Contract work refers to any type of employment arrangement where an individual is hired to complete specific tasks, projects, or services under a defined agreement rather than as a permanent employee. Unlike traditional employment, contract workers operate with greater flexibility - they may set their own hours, choose their projects, and often work for multiple clients at once. The terms of the engagement (such as scope, deliverables, deadlines, and payment) are outlined in a contract, ensuring clarity for both parties. 

    What qualities are desired from a contractor?

    Working as a contractor can provide a high degree of flexibility and autonomy, as they often can choose which projects to undertake and manage their own schedule.

    However, this also means that they must be knowledgeable in project management, budgeting, and the specific skills required for their field.

    It is crucial for contractors to maintain a strong network and reputation for quality work and timely completion to secure future projects and maintain steady revenue.


    What is a contractor in contingent work?

    In the realm of contingent, flexible, or temporary contracts, a contractor refers to an individual or company engaged for professional services on a non-permanent basis.

    This includes project specific roles in industries from IT to energy, construction and engineering.


    How do subcontractors fit into flexible contract work?

    In the context of contingent work, subcontractors are hired for specialised tasks within a larger temporary project. They focus on specific areas like IT, engineering, or other professional services, working under limited-term contracts.


    What are speciality contractors in the context of temporary employment?

    Speciality contractors in contingent work offer niche skills for specific project components, such as data analysis, quality control, technical design, or legal services, under temporary or project-based contracts.


    What is the difference between a contractor and an employee?

    The key difference between contractors and employees is their working relationship with a company.

    A contractor is typically engaged on a project-by-project basis, with no fixed term of employment or long-term commitment.

    On the other hand, employees have an ongoing relationship with a company, usually through an employment contract, and have certain rights and benefits, such as holiday pay, sick pay, and pension contributions.

    Read more about the benefits of hiring contractors here.


    How does one become a self-employed contractor?

    To become a self-employed contractor, individuals must typically:

    1. Identify a marketable skill or expertise
    2. Register as self-employed with a government entity (for example, HM Revenue & Customs in the UK)
    3. Acquire relevant insurance, such as public liability or professional indemnity
    4. Set up a clear contract with clients outlining terms and conditions
    5. Manage their own finances, pay taxes, and comply with all applicable regulations

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