Contractors vs Full Time Employees: Which is the Best Option for Your Company?

June 24, 2020 / by Jeff Metz

As a business owner or operator, your success hinges on your ability to hire top IT talent at an affordable cost. Fortunately, today's business owners have the luxury of choosing between a full-time hire and a skilled consultant or contractor. And with COVID-19 disrupting traditional business operations for many businesses, the ability to choose between these two hiring strategies is more important than ever.

With both hiring scenarios offering a host of attractive benefits, it is important to carve out some time to consider the pros and cons of each option. Below is a look at the key advantages of full-time and contract IT specialists, along with the best way to determine the ideal solution for your business.

What are some key benefits of hiring contractors or consultants?

The global IT outsourcing market is flourishing and is projected to reach nearly $80 billion by 2022. As a result, businesses have more contracting and consulting options than ever. With contractors competing to establish themselves as industry leaders, business owners are reaping the rewards of contracted hires who are more experienced than ever. Here are some of the top benefits of hiring contractors or consultants.

1) Cost savings

The cost to hire a full-time Software Engineer is over $85,500 USD. Many startups and small to mid-size businesses turn to contractors because they cannot afford to spend $56,000 on a full-time employee. Hiring a contractor enables you to pay only for IT services when you need them, enabling some companies to save tens of thousands of dollars.

2) No training needed

Contractors are self-trained or trained by their employer, thereby requiring minimal guidance from your organization. And with the average cost to train an employee now exceeding $1,200 USD, your organization will save time and money by hiring a contractor.

3) Receive services only when you need them

When you work with a contractor, you pay for services as you need them. This enables you to avoid having to pay for any services during lulls or vacation season. On the flip side, you receive swift IT support when you need it most. For example, you can increase your usage of IT contractors during peak season or to handle bottlenecks due to unplanned challenges such as COVID-19.

4) Save on office space and supplies

Hiring a contractor or consultant will help you free up space and furniture for your full-time employees. The typical IT specialist requiring approximately 60 to 250 square feet of space, along with a desk, computer and supplies. These are all expenses that you do not have to incur when you hire a contractor.

What are the benefits of hiring full time employees?

While the use of contracted specialists continues to grow, many businesses still prefer to hire full-time IT specialists. Here is a look at some of the many reasons why business owners stick to hiring full-time employees.

1) Loyalty

Loyalty is a precious commodity in today's gig economy. Whereas contractors tend to view their job responsibilities through a short-term lens, full-time employees recognize the need to work hard for the future. They are more willing to go the extra mile to provide the best long-term solution for a business as opposed to simply completing the project at hand.

2) Control

When you hire a full-time IT specialist, you can train them and groom them to work in a manner that is congruent with your work culture. This is not always possible with contracted employees, as contracted employees are trained to operate independently and exercise their independent judgment regarding the best way to complete a task.

3) Brand ambassadors

Loyal full-time employees are often a company's best brand ambassadors. They know the company's work culture, goals, and vision, and can play a key role in helping your business build a positive industry image. For example, they can refer outstanding job candidates to your organization or help introduce you to a key player in your industry.

4) Enhanced industry reputation

The presence of experienced, dedicated full-time employees bodes well for a company's industry reputation. Your workforce will feel more like a team or a family as opposed to a collection of temporary workers, which will help you in your efforts to attract top talent in the future.

What are some potential pitfalls of contractors and full time employees?

Clearly, there are many advantages associated with both of the hiring options above. However, before you decide which hiring strategy is best for you, it is a good idea to consider some of the negative aspects of each option. Here are some of the potential roadblocks you should keep in mind as you finalize your decision.

Pitfalls of hiring a contractor or consultant

  • Incompatible visions: Because contracted IT specialists are not officially part of your full-time workforce, you cannot dictate how they dress, interact with your team, or work. If the contracted employee works for an agency, you will need to lodge a complaint.
  • Friction with full-time employees: The tendency for contracted workers to beat to their own drum and operate independently may cause disruption or resentment among members of your full-time workforce.
  • Lack of familiarity with protocol: Every business has a unique protocol for handling emergencies such as the COVID pandemic. Learning and following these unique protocols quickly is not always easy, especially for a contract employee who delivers services to multiple businesses.

Pitfalls of hiring a full-time employee

  • Unpredictability. Businesses are anything but predictable. Six months of healthy revenue could be followed by a year of sluggish sales. When downward trends take hold, you may find yourself facing the prospect of terminating the employee due to your inability to pay their salary.
  • Seasonal fluctuations: Most businesses have peak seasons that account for a large percentage of their annual revenue. It is during these peak seasons that demand for IT services will likely be the highest and a full-time employee will come in handy. However, during slow seasons, you may find yourself paying a full-time salary to a person who is only working a few hours per week.

What is the best way to determine the ideal solution for your business?

As outlined above, there are attractive benefits to hiring contractors as well as full-time employees. If you would like to speak with an industry expert about which option is best for your company, then reach out to the talent solutions experts with Eclaro.

During your complimentary consultation, an Eclaro consultant will review your business needs and provide the guidance you need to make the best decision for your business. For over 20 years, Eclaro has provided flexible solutions to companies across the globe. Whether you need a full-time IT specialist for the long-haul or an experienced contractor for a short-term project, we can deliver the talent you need. We look forward to helping your business thrive with five-star IT talent!

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