employees vs contractors

Any time that you are in a position to make a new hire at your business, it usually indicates that you are having success. That’s great news – but choosing the right person to fill the vacancy is the next step, and it is definitely an important one. But before you get around to assessing the suitability of the candidate, you have a decision to make: should you hire an employee or a contractor?

In some cases, the option is self-evident due to the nature of the role. But you might find that if you think about it – either would be suitable. It is important, then, to weight the advantages and disadvantages for bringing in either type of worker. 

There are many differences between employees and contractors, in what you can expect from them and what they will bring to your business. Here we take a look at both the pros and cons of hiring employees and contractors to help you establish which one might be right for you. 

Employees are better for the long-term

It goes without saying that if you are looking at long-term projects or on-going work, it makes a lot of sense to hire full-time employees. 

Yes, you might find that contractors are available and can offer an amazing service, but what you are hiring in an employee is long-term expertise, making it more likely that you will have the right person for the job available no matter what comes up.

In this sense, it can be better to have an employee on your books, rather than simply hiring a contractor when you need it. Getting the contractor in will take time, and in that time an employee may have been able to do the job effectively. 

Noticeably, if you are hiring a worker over a longer period of time, you will see noticeable cost savings by choosing an employee. Of course, the reverse may be true for contractors.

Employees offer continuity 

No matter what your business does, the continuity of employees can be extremely important. This includes from the perspective of providing service to customers and building relationships with suppliers, through to understanding the broader goals of the business and what you are trying to achieve over a longer period. 

Additionally, rather than having to continuously train new staff constantly, employees give the chance to carry out the major training once and then simply add to their knowledge. This can be a far more efficient way of working and can save you a significant amount of money over time

It is possible to set up long-lasting relationships with contractors, but you are always at their mercy if they decide to move on. 

Employees offer more control

When a business brings in a member of staff as an employee they can have a relatively high level of control over their working day and their output. This means that employees are ideal if you need to carry out work that requires a specific time frame or working hours or requires constant supervision from another member of the team. 

It is easier to set down extremely specific requirements in job adverts for employees, whereas contractors are at liberty to choose their own working schedule and hours, as they are functionally being brought in to do a job. 

This shows that it really does depend on what you need from the worker as to whether it is best to hire an employee or a contractor. It cannot be stated that one form is superior to the other, as contractors have a range of advantages too:

Contractors offer very specific expertise

“Contractors are typically brought in because they are able to offer specific expertise that a business only requires for a single project or for a short time,” says Giles Knights of ClearHub “this could include everything from DevOps specialists to digital transformation consultants. It can also be extremely useful for businesses working in more difficult financial times to avoid having large long-term payroll obligations”. 

Typically businesses take on contractors because they are missing a specific element of expertise or experience. There are now specialist recruiters that make it easy to find the contractor that you need. 

For example, it may be the case that for a specific marketing project, you need someone with experience in animation. While many businesses have marketing specialists, few can afford a very specific skill like that as a full-time employee, so this can be a perfect time to hire a contractor. 

Contractors are ideal for flexibility

Many businesses have both busy periods and not quite so busy periods throughout the year. If you have a good understanding of when these periods are, you are in a good position to hire a contractor.

A contractor can be brought in to provide their experience and expertise only for a specific time. This avoids the need to hire a full-time member of staff all year round. In this sense, it may actually be cheaper for your business to hire contractors, especially if the nature of your business is seasonal

Contractors are less complex from a legal perspective

It is also true that it can be more complex to hire an employee than a contractor. This is because there are more laws and regulations surrounding employees and the things that employers must do for them. This includes everything from salaries and overtime to pension contributions and more. 

This is something that is less of a challenge with contractor workers. Functionally, contractors are paid for the duration of their working period and otherwise can be considered self-employed and therefore not beholden to any rules surrounding employees. 

Final thoughts

Whether you are hiring a full-time member of staff or simply taking on a contractor for a short-term project, there are advantages and disadvantages to both scenarios. It can really pay to think about the long-term goals of the business, even in the case that you are hiring for a short-term reason.

Contractors and employees can both be cost-effective solutions depending on the situation. It can be smart to work with experienced recruitment professionals who will be able to help you make a decision around hiring. 

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