Contracting vs Permanent Employees, Who Should you Hire?

Whether you’re going through a period of growth or just need an extra hand with a project, hiring another employee can be a smart decision to make. But it’s not one that should be taken lightly.

While you might just automatically consider hiring a full-time permanent employee to assist you, you also have the option of contractors. These self-employed and often highly experienced workers can come in to help you on an ad-hoc basis. This can be an ideal solution if you only need someone very occasionally to complete projects you are unable to do.

On the other hand, a permanent employee can focus more time and energy on your business and its goals, while also making it more stable. Any time you aren’t there, a permanent employee can take the reins and keep your business in operation.

So, who should you hire? A permanent employee or a contractor? We know that this can be a tricky question to answer, so we’ve listed three important factors you need to consider to make your life easier.

Costs

When hiring a permanent member of staff, you firstly need to decide on a suitable annual salary that reflects their job role and responsibilities. On top of this, you need to factor in things such as work benefits like holiday and sick pay, maternity leave and pension schemes. There’s also the cost of business essentials such as payroll taxes and office equipment to consider. Understandably, these costs can add up very quickly so you need to make sure you can maintain them in the long-term.

Unlike permanent employees, contractors have the freedom to negotiate how much they get paid. Their salary can be quite high, especially if they have specialist skills or experience to offer. While this can be off putting for some employers, it’s important to remember that contractors generally only work for short periods and their contracts don’t always include the necessities that a permanent employee requires. So in comparison, they can work out to be cheaper in the long run.

Quality of work

Most contractors have years of experience in their chosen field, as well as specialist skills to match. This gives them the confidence to enter your business and jump straight into a task, while also providing fast, quality results. With contractors, you won’t have to spend time and money on training beforehand, which is why many businesses choose to delegate certain projects to contractors rather than training up their existing workforce. Contractors can also provide new ideas and solutions, thanks to their experience working within several different companies.

It will cost you more time, energy and money to train your permanent employees to fill the gaps in their knowledge- particularly if this is their first role within a new industry. So you may find that the quality of your output is a bit shaky to begin with but it will improve as your employee gains confidence. However, because they will be spending more time working for your business, they will gain a greater understanding of the exact practices you use to remain consistent and functional. This is something that a contractor may not have the same opportunity to do.

Company Culture

Having a positive company culture within your business is a sure-fire way of keeping your team happy and therefore more hard-working. So, you need to ensure that the person you hire fits in with everyone who works for your business.

Permanent employees obviously have more time and opportunity than contractors to develop relationships with your clients and team. They can become fully immersed in the lunches and team building exercises you organise and get involved in any last-minute meetings or decision making. If treated well enough, they may even take on extra responsibilities and work longer hours or extra shifts to improve your business.

Contractors don’t always have the chance to get to know your team and they could miss out on the extra-curricular activities that are organised due to their short and often strict contracts. It’s also not unheard of for tension to build between contractors and permanent employees over their work schedules and pay rates. While this isn’t always the case, it’s something that you need to consider before you hire.

So, whether you’re wanting to build a strong permanent team or just need a temporary workforce to help you meet your project deadline, considering these factors should make the answer to your question crystal clear.

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Luke Hartle

31st July

Hiring Advice