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Contract or Traditional Employees: Which one Should you Hire?

Published December 26th, 2018 by Comrise

Contract or Traditional Employees: Which One Should you Hire?

Thanks to the increased globalization of markets and the ever-increasing advances in technology across all industries, the expansion of the ‘non-traditional’ workforce continues to accelerate. These workers, comprised of temps, contract workers, consultants, freelancers,and seasonal workers, can be found at all levels of an organization with some estimates reaching as high as 17 million in the U.S. alone.

Moreover, an increasing majority of these non-traditional employees have chosen this form of career due to the ever-evolving mindset regarding the employer-employee relationship. Every day a higher value is being placed on flexibility and autonomy, which traditionally many organizations provide, but not always to the degree desired by many individuals. According to some sources, as many as 17 million people fall into these categories, and with the number steadily increasing, every organization should understand the pros and cons of hiring contract professionals.

Traditional vs. Non-Traditional Employees

The Benefits of Contract Employees:

  • A cost-effective way to fill in for employees on family leave, maternity leave, vacation, and sabbaticals
  • May demand higher compensation, but they don’t usually get “soft benefits”
  • Temporary workers can help reduce overall staffing costs, keeping the load manageable for regular employees
  • Offers the opportunity to “try out” individual for future full-time positions (often called temp-to-hire)
  • Fast way to find well-trained and pre-screened employees

Hiring a contract worker may save a business money on salary, health benefits, paid vacation, etc., but there are limitations to hiring a contract worker over a fully-on boarded employee, and vice versa. Here are some additional insights to understand the differences.

Cost:

To start, full-time employees are often a more cost-effective option when looking at the comparable cost to use a contractor for performing the same duties. Therefore, from the perspective of cost-per-hour spent on a single project, a full-time employee is typically the most cost-effective option. However, once you add in the cost of benefits, training, and salary increases, all things removed from the equation when hiring a contractor, a full-time worker gets more expensive the longer a project or contract runs.

Training:

Full-time employees are able to be trained or on boarded for a specific role or project. Thus, if your organization is exploring new technologies or markets, investing the time and money up front in a full-time employee allows your organization to have a permanent member that understands the full scope of the initiative. Alternatively, hiring a contractor for such a niche project or task might be applicable for “testing the waters” or if they have an essential skill needed for the transition.

Loyalty:

A full-time employee is more likely to build company loyalty and personal connections, which can result in higher productivity over the long-term. A contractor might not develop that level of investment in the organization or its goals, but with proper screening, can easily provide the same outcomes.

Project Management:

Organizations have more control over a full-time employee’s day-to-day efforts; directing them as needed. With contractors, these may not be possible as they may have other commitments or contracts to balance. That said, a contractor may still be a useful resource despite not being subject to the same level of oversight.

Timelines:

Finally, the process of on-boarding a new full-time employee can often be cumbersome. Between interviewing, on-boarding, and training a new employee extensive amounts of time can pass, requiring many hours of collective labor to complete.  A contractor can often be found and brought on very rapidly translating to rapid results in the short-term.

Above are just a few of the highlight to consider when debating on a hiring a full-time or a contract employee. Regardless of which route your organization goes, one critical recommendation for both avenues is to thoroughly consider the process to assess any individual your company may use.

Assessing with Confidence

Despite the differences in hiring a full-time versus a contract employee, one of the common aspects shared by both groups of workers is that they can, and should, be thoroughly assessed prior to hiring.

In order to discover if an applicant for a full-time position is going to be able to perform the work required and match up well with the mission and culture of the organization, a pre-hire assessment is used. During these their professional and interpersonal communication skills are discussed, as well as their motivations are all critical factors affecting their performance and used to determine if it is worth spending the time and money in hiring them.

Similarly, bringing on a contractor into your organization with a similar process is essential. A short skills assessment, reference checks, and conversations with them to assess their level of ability for the project or task, as well as any history of working with similar clients are all valuable things to assess their fit as a contractor. This valuable information can also guide the relationship for as long as they are contracted.

Whether an individual is applying for a full-time position at your organization or bidding for a contract, it is essential to assess their ability to do the job. Determining factors such as length of the work to be done, cost, and specialization needed can all help decide whether to go with a temporary or permanent employee, but either way, you need to know whether they’ll be more helpful or harmful after hire.

At Comrise, we take great pride in our ability to not only source individuals to fill any open positions your company may have but utilize the full scope of assessments mentioned above to find highly-trained individuals who will fit in with your company's mission, goals, and employee culture.  In doing so, we can assure that your company's time and resources result in the biggest possible impact, furthering your ability to compete in the ever-changing landscape.

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