Should you hire a contractor for your company?

When you have several big projects coming up or a headcount has opened up, should you hire a contractor or get a new employee? Is your workforce scaled for growth, or will it remain steady?

What is a contractor?

Contractors are independent professionals or businesses who offer their services to other companies for a set fee over a fixed period. They are hired by other firms to complete a function over an agreed period and are not employees of those businesses.

They can be a one-person operation or can be part of a company that manages contractors. Contract workers negotiate their own fees and working arrangements and can work for more than one client at a time. They are also sometimes called freelancers or temporary workers.

Related: 3 ways to be agile during business disruption, fast

How does hiring a contractor add value to your business?

A contractor does more than plugging a gap for your business. When you tap into the expertise of contractors, you are helping to grow your business too.

A fresh perspective and access to skills

While you may hire a contractor for a specific project or as a stand-in for staff on extended leave, contractors can bring a fresh outlook based on their experiences at different workplaces.

“Experienced and specialised contractors have a wealth of experience across different projects, companies, and industries,” says Marlinda Zulkifli, Head of Page Contracting Malaysia. They bring new ideas and introduce new ways of working to your team, enabling your existing staff to learn and think differently.

On top of that, contractors are motivated to succeed as they build their reputations through their projects. They are results-driven, and positive feedback will help them get more projects in the future.

Related: 7 strategies for HR leaders to navigate periods of change

Adapt to changing market needs

In normal times, it’s not uncommon for the need for headcount to shift rapidly in conjunction with the changing needs of a business. However, this point has become more crucial for business survival. As organisations adapt to new business models and readjust their processes, the need for agility and flexibility is essential.

In a volatile market with a high degree of uncertainty, short-term contractors provide the ideal opportunity to assess market shifts and organisational needs on an ongoing basis, rather than committing to new employees permanently. Contract workers support lean business planning, which allows businesses to respond with greater speed and flexibility to the ever-changing nature of the market.

Trial new employees or positions

Hiring a new staff member requires significant upfront investment and can be time-consuming. Initially hiring potential full-time, part-time or casual workers on a contract basis allows a business to assess how that individual will fit within their company environment and culture. During the contract period, managers can determine whether a candidate is a good fit for the job.

As companies rapidly change and adapt, contractors also provide a testing phase for organisational headcount needs. It provides management with an insight into which roles will be crucial as the business moves forward, and which will become redundant.

Complete projects efficiently

Temporary staff are often brought on board to complete certain tasks or projects. Because of this, they’re not tied down to the everyday tasks that come with a permanent role – managing an overflowing inbox and receiving ad-hoc requests, for example – and can therefore focus solely on getting the job done.

You can also choose a temporary employee or contractor who matches the exact skill set you need for a task, which is particularly beneficial if you have a skills gap within your current team.

Fill temporary skill shortages

Whether it’s due to employee turnover, parental leave or a family emergency, every company needs to deal with unforeseen issues that arise within their team. These often leave companies struggling to meet deadlines and put additional pressure on existing employees who need to compensate for these shortages and subsequent changes in your organisation.

Did you know 52% of employers cite talent shortages as the main reason to employ temporary staff? In unexpected circumstances, freelancers and contractors can serve as a quick fix while you find a long term solution. If a member of staff has departed suddenly, or you simply haven’t had enough time to find a replacement, hiring a temp can make this transition easier, and there’ll be no loss of productivity.

Hiring contract workers offers the advantage of bringing in the right knowledge and skills for jobs requiring specialist expertise, enabling companies to efficiently tackle complex projects and achieve exceptional results above and beyond core business.

By having a pool of potential workers, whether they are freelance or an independent contractor, you can quickly call on the right people to lend a helping hand on any outstanding projects, without needing to worry about the recruitment and onboarding process.

Lower overheads

You don’t need to provide employee benefits like employer taxes, medical bill compensation, transport allowance or pension for contractors. And therefore, hiring contractors is more cost-effective than hiring permanent staff.

Looking to work with contractors? Contact our recruitment consultants to connect with the top contractors in your industry.

When should you hire a contractor?

Aside from filling in for full-time staff on extended leave, contractors are suitable for seasonal projects requiring more personnel. If you are testing a campaign where demand is uncertain, hiring a contractor would be appropriate as well.

If time is of the essence, you could consider hiring contractors first. Contractors or temporary employees can help fill the gap and provide an interim solution. This arrangement would afford you time to decide before recruiting the right full-time candidate.

However, if you are looking to build a team, having contractors would not be suitable. This is because you want to create stability in the team, and using contractors to fill vital gaps can distract new staff.

Contractors are short-term hires, and you should not rely on them to help you develop the business. While temporary employees can add value to your company, they do not add to the core value of the business in the long run.

So, if you find yourself extending the contract of your contractors, again and again, that would be a telltale sign that you most likely need a permanent staff for that role. Nonetheless, having a network of reliable, skilled contractors on your contact list is essential in the event that you need extra help.

Read more:
How does Michael Page attract the best talent for your business?
5 interview questions to ask to tell a great candidate from a good one
Why an effective onboarding process is more important than you think