Are Contract Employees Right for Your Business?

Your company needs to be staffed optimally at all times to achieve success. That can mean using a mix of people, from full-time and part-time to contract workers. However, when it comes to making a decision about an employee vs. contract hire, what’s the difference? And what advantages come with a contractor? Here are some details to keep in mind.

Contractors vs. full-time workers

The easiest way to understand the difference is that a contractor is like a service, provided to you, while they pay their own taxes and don’t receive benefits, like health care, from you. In addition, they generally work on projects for you for a defined period of time or on a project-by-project basis. They will then invoice you, which you pay according to the terms of their contract.

An employee, on the other hand, works directly for your company and receives a regular salary. As a result, you are responsible for taxes and likely offer them additional compensation in the form of health insurance and retirement benefits.

What are the advantages of contractors?

Using a contractor offers a variety of benefits when you have a short-term project, one that requires specialized skills, or a regular need to fill a skill gap, without enough demand to hire a full-time employee. Because they work with a wide range of companies, contractors tend to offer a more diverse skill set and are up-to-date on a variety of technologies – meaning they can be valuable contributors for you.

Some other advantages include:

  • Cost Savings. Rather than hiring a full-time employee and paying taxes on them, as well as funding benefits, like health insurance and retirement plans, you can simply pay the contractor the agreed-upon hourly wage or project cost. Once the project is over, they will move onto their next assignment without ever adding to your fixed overhead.
  • More Flexibility. Working with a contractor gives you flexibility when it comes to keeping your company optimally staffed. You can retain them for a specific project and then let them go, once it’s done, or bring them in to provide extra support when demand is high. This helps keep your business running efficiently, while reducing burnout and turnover with your core staff.
  • Less Liability. Employees have a wide range of protections under the law, which increases your liability. Contractors, on the other hand, don’t have those same rights because they are independent business people. As a result, you don’t have to worry about lawsuits or legal claims as much.

Need help hiring your next contractor?

At Provisional Recruiting, we can help you find the skilled professionals you need. We have a broad network of talented and dependable contractors, in a range of industries, ready to get to work on your project or assignment. Contact us today to learn more about our contract staffing services.

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