Contractors vs Permanent Staff - Which Is Best For My Business

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The conversation around hiring contractors vs permanent staff is heating up. It's no secret that the use of contract/temporary workers increases in the midst of uncertainty, and I'm sure we can all agree that 2020 had plenty of uncertainty. If you are weighing up the pros and cons of contractors vs permanent staff, we have put together some points to help you select the best option for your business.

Benefits of Hiring a Contractor

Reduces Overhead and Hiring Costs

Hiring contractors reduces overhead and hiring costs with speed to hire. If you hire permanent staff, you have to be ready to commit a large amount of time and money to:

  • Advertising your job role

  • Sourcing the best candidates

  • Interviewing candidates

  • Investing in your new permanent staff to retain them. This includes insurances, benefits, paperwork, training programs, salary reviews, performance reviews, equipment, PTO, and much more.

If you are not ready to make the investments tied to hiring permanent staff, contractors might be the best fit for your business. You can utilize a staffing agency, who will advertise, source, and interview the best candidate for you. This can dramatically shorten the extensive permanent staff hiring process.

Hiring Contractors Through Specialized Agencies Streamlines the Hiring Process

If you work within a highly skilled-based industry such as software development or coding, hiring contractors through specialized agencies can streamline your hiring processes. For example, within the software development industry, it commonplace for niche-focused agencies to use custom-built coding tests and technical assessments based on specific language requirements to shortlist candidates.

If you operate within a technical skill-based industry, choosing a contractor via an agency focused on your industry might be your best option. As it is their niche, they will be experts in vetting potential candidates on your behalf, to ensure you hire the best talent based on the candidate’s proven skillset.

Test the Water Before Choosing a Permanent Member of Staff

It can difficult to predict what it is actually like to work with someone based on initial interviews. You might also be unsure whether there is a need for the specific role within your business, and if you commit it can be harder to diminish the position if demand is not met. A benefit of hiring contractors is that it allows you to test the water before deciding if a permanent worker is the right fit. If you are impressed by the quality of work that the contractor has provided, you can always offer them a permanent role.  

More Talent to Choose From

Contractors are usually highly skilled professionals in the pursuit of a wider range of projects to broaden their work experience. Utilizing staffing agencies to source contractors who already have a huge book of vetted talented professionals in your field, provides you with more talent to choose from when compared to the expensive and time-consuming process of sourcing staff alone.  

Flexibility

Flexibility is a recurring theme that occurs in the contractors vs permanent workers debate. Contracting staff provides you with the option to bring workers onboard to help out your permanent staff during busy or turbulent periods. 

For example, your business may be experiencing a period of limited resources due to staff turnover or peak seasonal demand. Hiring a contractor helps fill this gap for the period of time required to complete the short-term project.

If you choose to hire a contractor, check out these common mistakes to avoid, so you can improve your business and their experience.

Benefits of Hiring Permanent Staff

Stability of a Loyal Team

When you hire a full-time employee, it’s much easier to create a strong and loyal team. If you hire multiple contractors you run the risk of disrupting your internal team’s workload and routine. There is also the added responsibility of frequent training to get your new contractor up to speed in your industry. If you hire permanently, your staff are likely to be more invested in building a successful business as their output directly impacts them.

Help is Readily Available

When you build a stable team of permanent staff, if you need additional cover (for example, if someone is off sick or on PTO), they are more likely to step up and help out. If you are leveraging contractors' help for short-term projects, they may need advanced notice of added responsibilities. They might also be unavailable to work outside of their set agreements.

Permanent Staff Know Your Business and Processes

If you have permanent staff members, they eventually build up knowledge of you, your business, how it operates, the essential daily and weekly tasks, and the industry as a whole. This knowledge and experience are some of the main factors which help business operations run smoothly. You can also get ahead of the competition by developing long-term experts within your field.

Let’s Settle the Contactors vs Permanent Staff Debate

Contractors vs permanent staff...The right option for you comes down to your overall long-term business goals and current needs. For example, do you need help with a project quickly or want to test the market before committing long term to a staff member? Hire contract. Do you want to build a long-term team/ department? Are you ready for the responsibilities and challenges that come with this? Hire perm.

Most businesses, particularly during uncertain times contain a healthy mixture of contractors to add their expertise to short-term projects before committing to strategic permanent contracts.

Here at PGC, we have witnessed huge growth for our clients this year as many of the businesses we work with have significantly increased their revenues from placing contract workers in the U.S. If you’re a recruitment business and want to learn the basics of placing contract workers in the U.S. market, check out our free USA expansion training.