Home » Contractor Vs Employee: All The Pros And Cons You Need To Know

Contractor Vs Employee: All The Pros And Cons You Need To Know

When companies start to hire staff, there is one big question they need to ask themselves. Should they go for full-time employees or use the services of an independent contractor? There are a number of different pros and cons that come with each type of worker. In this blog, we’ll go through some of the main ones to help you come to the right decision for your company.


When you are thinking of hiring a full-time employee, you need to figure out if you can really afford it. After all, you will need to pay a lot of extras on top of their regular salary. All of your employees who work full time will be entitled to paid vacation and sick leave. You will also be responsible for contributing a certain amount to their health insurance and pension plan. As you can see, the cost of hiring someone full time can soon add up.  To make sure that you are paying everything that you are legally obliged to, it is a good idea to check with an employment law services firm. They will be able to run over everything that you need to provide for your workforce.

However, if you employ a contractor, you do not have to pay any of these extras. All that they are entitled to is the payment for the work they carry out. But you need to bear in mind that contractors’ wages are usually slightly higher than what you would pay a full-time member of staff. But even so, they still normally work out a lot cheaper than hiring employees. And it is all because you don’t need to pay for any benefits, such as paid vacation leave.



Employee Turnover

Most contractors will only work for a specified period. They will come in, do the job that you hired them to do, and will then leave. Some companies see this as a major advantage. That is because they can bring in specialists who can perform one task. Then, when they are finished, they can bring in some other specialists who have a different skill set to perform a completely different task. This is seen as a great benefit for businesses that are constantly growing and adapting to their environment. They are able to change their workforce regularly as their needs and goals change. This is something that is impossible to do when you have a set team of full-time employees. After all, your company will only be able to adapt as quickly as your full-time staff does.

Even though some companies see this as a major advantage, many businesses see this high turnover of contractors as a negative. One reason for this is that it could bump up your costs. And those cheap contractors don’t work out quite as cheap as you had originally thought they would. Associated costs include training and recruitment. Before you go down the contracting route, you need to ensure that your company can handle these costs and the quick turnover.

There is another point to remember when it comes to your employee turnover. And that is the effect that it has on your company’s culture. If you employee full-time employees, then you will be able to build up a very warm and friendly office culture. However, if you prefer contractors who are regularly changing, you will find that creating a great office culture is a big challenge. That’s because they won’t be quite so loyal to your company. For this reason, some companies prefer to go with full-time employees. Especially if they share all the company values and want to see it perform well and continue to grow.




One benefit of contractors is that you can choose whether they join you in the office or work remotely. As you will be able to find plenty of remote contractors, you are increasing the talent pool that you can hire from. After all, you don’t need to only hire the contractors who are based in your local area. You can look further afield. This means you are able to look for reasonably priced, expert contractors no matter where they are located in the world. This isn’t the case when you are looking for full-time employees. You will only be able to hire those who already live in your local area. Unless you decide to relocate someone especially for the job. However, before you decide to go down this route, you need to remember that you will be expected to pay relocation costs. And that can work out very expensive!



Office Space

Only got a small office but need to hire a new team of people? If you can’t afford to relocate to a larger office, you are probably better off going with some contractors. That’s because you will be able to find ones who can work remotely, and they won’t need to come into your office. But if you are adamant that you want full-time staff, you will have to start looking for a new office space. For this reason, many small businesses choose to hire contractors until they are at a point where they can afford to rent a larger office.




How much do you want to engage with the people who you hire? If you have a project that needs a lot of attention, you may prefer to hire people who can work in your office alongside you. Full-time employees are best for this. However, you could also hire contractors who are able to work in your office. If you don’t require much engagement with a worker on a particular product, then you will be alright hiring remote contractors. If you do need to check-in with them, you can always arrange a Skype call. Some companies prefer to get to know a contractor by inviting them into the office to work. Once they know that they can rely on them, they give them more freedom and allow them to work remotely.

So, contractor or employee? Which would you prefer?

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