Why do companies hire contractors?

So why do they? Isn’t is easier just to hire a temp or get one of their permanent employees to do the job? 

The Contractor marketplace is growing. I predict that this will double in size in the next five years in New Zealand. Now that’s a pretty big statement but if you consider that: 

1.The list of skills a permanent employee has to use is restricted to the job specification they have, just try and get your SQL database developer to learn Java or find a roofer that is also a good electrician you will see what I mean.

2. The daily workplace has changed. Everything really is getting faster and more complicated (no, it’s not age creeping up) Businesses need skills to complete set tasks, and you certainly don’t want to hire a permanent employee for a set task.

3. Contractors are available to complete specific tasks (not jobs) and get paid on the basis of finishing the task agreed. This is a big difference to getting up and doing a “job” with a weekly pay check.

4. Contractors can be released easier than an employee.

5. Contractors can do the same work a permanent employee can, but they can start tomorrow.

6. Contractors are a cheap way to bring in skills and push knowledge into your company by setting up business systems and processes.

7. it’s cheaper. More results for less money because the employer knows the bottom line and can calculate the cost to ROI of a contractor, it’s an effective HR solution than permanent employee’s.

8. Boom and surge. When you need skills for a limited time, PAYE contractors, (temps) can meet requirements; it’s how companies cope over Xmas or during product launches.

9. Contractors don’t take time off. (Well they do, but they are not being paid by the hour. So no work on their part means no earnings and even the potential of messing with their contract obligations)

10.  The expert you need is only available on a contract basis.


More resources

Contractor Guide - Pros and cons of contracting in New Zeland Becoming a contractor can mean in some instances that you can treble your income overnight, this is not the norm, but for most people it does mean that they choose when they want to work and have more flexibility than permanent employees. read the ups and downs of contracting.

Contractor Guide - Limited company or managed company services If you have many clients and work different contracts it may be more prudent to have your own limited company, read the online contractors guide on formation vs company managed services.

Contractor Guide - What is a contractor If you thought that contracting was maybe an option for you, but were not sure what the differences were between contracting, freelancing and temping - read this before you start applying for work or jobs.