Originally published July 6, 2017, and revised July 28, 2020.
Taking on a new employee is an investment. There’s the time spent on recruiting and interviewing, the cost of efficiency lost during training time, the money spent on overhead, salary, taxes, securing their benefits, and professional development. You may find that while timing isn’t quite right to hire a full-time employee, your team still needs support. Maybe they’re working on a big project and need more hands to complete it on schedule, or they need training. But is this the right time to hire another full-time employee? In situations like these, we recommend turning to the contingent workforce: a vast network of contractors, freelancers, consultants, and more. Hiring a contractor can deliver you the expertise and support you need on a more flexible budget than committing to a full-time employee.
So when does it make sense to hire on contract? Here’s our 6-point checklist:
1. You’re exploring niche skillsets or new technologies
2. You need support on a short-term project
From a resource management perspective, it doesn’t always make sense to take on the cost of onboarding and developing a new hire for work that isn’t long-term. Sometimes when your team feels particularly overloaded with work, a new full-time hire feels like the obvious solution, but the stress of hiring and training may outweigh the benefits of additional help. Step back and look at the scope and duration of your projects. You’ll find that contractors provide support to your team when and where you need it without disrupting everyone’s overall workflow.
3. You need daily tasks handled so your existing staff can focus on a new project
Your current team needs career growth and the stimulation gained from exploring new solutions and technologies as they progress through their careers. They also want the experience gained from upgrades, conversions, and new deployments your company may be considering. But who will handle the demanding day-to-day tasks? Bringing in contractors to keep normal operations running smoothly is a great way to free up your existing staff to focus on high-profile company initiatives.
4. You have budget or headcount restraints
Full-time hires can be costly upfront, which often with time-consuming approval, interview, and onboarding processes which may not align with deadlines or target dates. If your team has a limited budget or restraints on hiring new people, that doesn’t mean that you’re out of options. Contractors—who are paid hourly—can be a simple solution.
2021 Portland Metro Salary Guides
Compare market rate salary ranges for over 100 job titles at companies of all sizes across the Portland Metro area. Everything you need to determine hiring budgets or negotiate a job offer is right here!
5. You need a fresh perspective
Contractors tend to be highly skilled and specialized within their field—and for certain companies in which teams are siloed or management needs a fresh perspective, they can be a necessary catalyst for change. When choosing to consult with a contractor, you can put your trust in their subject matter expertise. This can be especially crucial if management has developed a comfort zone for legacy procedures or technologies. Contractors can serve as an external motivator that helps companies stay up-to-date and competitive.
6. You want to give a candidate a test run
It can be difficult to fully glean the potential success of a candidate based on their resume and interviews alone. Candidates who look great on paper may be missing the interpersonal skills necessary for success in their new role or they might not mesh well with the rest of the team. On the other hand, candidates who may be lacking the right experience can end up being fast learners and bring new energy to the team. If you want to give a new hire a test run before they’re fully onboarded, it makes sense to hire on contract first. The most common case for this is an agreement known as contract-to-hire, in which candidates have the opportunity to work on contract during an initial period for their new company. If the contract period ends up being a success, they can be hired on full time.
If you’re working with a staffing agency, that process becomes even more seamless as they own the employment relationship, handle the screening, interview coordination, and onboarding for those contractors as well as their benefits and payroll. If you hire someone on contract-to-hire and they don’t end up working out as successfully as you’d hoped, the agency can help you have that tough conversation with that candidate and manage their transition elsewhere.
If you decide that you’re satisfied with your contract-to-hire placement and are ready to transition them into a full-time employee, that’s even better! When you make a great choice on a hire, you build community and loyalty within your team. Great hires can move up the ranks, take leadership roles, and end up being a worthy return on your investment. When you take the time to nurture your employees and let them grow holistically within your organization, they become advocates for your business and your brand.
Looking to hire a contractor? Contact VanderHouwen to discuss how we can support your staffing needs.