Why use a contractor?
If your small business is looking to expand, don’t count this option out. You might actually be better off hiring contractors instead of employees for your business.
Here are some reasons you might want to hire a contractor instead of an employee.
Utilising a service you don't need regularly
You are growing your business into a new niche or market or simply have extra work coming in, you might find yourself needing some temporary help
You need to offer a quick turnaround but due to current workload you don’t have the resources.
Or somethings else?
These are instances where hiring a contractor might actually make more sense than hiring an employee, Contractors are already skilled in the services you need, alleviating the need for training. Plus, contractors know their work may not be on-going, making them perfect for tasks you don’t need performed regularly.
Consulting
If your business needs help or advice on a new project or process, you might want to utilise a contract consultant. Unless you need to consistently review processes or policies, having an employee switch from another job to review something else won’t be beneficial for your business in the long run.
Do keep in mind that if your business is expanding into a new area and you need help with the same task regularly over the long-run, an employee could be a better choice than a contractor. However, starting out with a contractor could provide a good “test run” to see if it’s something your company could grow into.
Contractors can be cheaper
You may pay more per hour to hire a contractor, but you likely won’t pay as much as you would for an employee. With a contractor you don’t have to pay taxes or benefits. Depending on the service needed, most contractors usually have their own certifications. These are things that you might have to pay for if you were to hire an employee. Even if you need a contractor for a year-long project, it probably won’t cost you as much as you would pay to have an employee for the same time.
Despite many contractor beliefs to the contrary, the tendency for companies to avoid contract staff is not always about cost.
When a permanent employee is taken on there are lifetime costs to be considered, not simply the annual salary:
• Possible recruitment agent fee
• Gross salary
• Employees national insurance
• Work space and extra tooling
• Expenses
• Subsidies (coffee, meals, social events)
• Sick pay
• Holiday pay
• Maternity/Paternity pay
• Pension and PAYE contributions
• Administration
• Training
• Notice period
• Possible redundancy pay
With a contractor, you pay the invoice, that's it.
More flexibility
If your business revolves around seasonal work, or there are times where business is naturally heavier, hiring a contractor is the way to go. By hiring a contractor, you aren’t obligated to keep paying them when work doesn’t come in or the season ends. Most contractors agree an amount of work to complete and as such can be easily terminated should the work dry up and similarly, be resumed should more come in, reducing outgoings maximising profits.
