In this ever-changing employment landscape, sometimes traditional hiring methods just don’t suffice.
The Benefits of Hiring Contractors – Company Advantages
Paid for from a Project or Miscellaneous budget
Also, one of the best benefits is that the contract fee comes from a Project or Miscellaneous
budget, rather than your I.T. budget.
Immediate availability of skill set
Option of temp-to-perm conversion (try before you buy)
Increase staffing flexibility
Save money by not providing vacation or benefits
Outsource accounting issues (payroll, timesheets, invoicing)
Outsource human resources issues (workers’ comp., benefits, etc)
Reduction of unemployment exposure
Maintain budget controls
Eliminate pre-hire costs
Avoid office politics
More Benefits of a Contract To Hire Are
Try before you buy – If they don’t work out you can cancel the contract at any time.
Hire them without any fee – After 6 months you can hire them without any additional fee.
Save Money – You will save money by not providing any benefits, and by not providing any sick or vacation days until they become an employee.
Employer savings – It typically costs employers 35% more to hire an employee than a contractor. (FICA and other taxes, sick days, vacation days, other benefits, etc
Reduction of unemployment exposure
Maintain budget controls
Eliminate pre-hire costs
Taxes and Insurance savings
Social Security/FICA (currently 6.2% on the first $90,000 of salary – www.ssa.gov),
Unemployment/FUTA (6.2% on $7,000 of salary – http://workforcesecurity.doleta.gov/unemploy/uitaxtopic.asp) and Medicare (1.45% with no salary cap – www.ssa.gov).
Workmen’s compensation premiums will depend on the category of your employee, with clerical at about 0.3% of salary and manufacturing at 7.5%.
Below are four client hiring problems that contract staffing can solve:
Fear of hiring
- The Stock Market (and the economy) can still be tumultuous at times, so if you don’t want to fully commit to direct hires, contract staffing offers a risk-free way to bring on help.
- If business slows or the economy “goes south,” you can simply end the contract assignments.
Fear of hiring the wrong person
- When you do need to hire long term, you want to be absolutely certain you have the right person.
- Contract-to-direct arrangement so you can “try-before-you-buy.”
- If the person works out, then you can hire them directly. If not, you can end the contract assignment and try somebody new.
Hiring freezes
- Contractors come from a different budget than traditional employees. As a result, they do not represent a permanent investment. Thus, hiring managers have an easier time getting approval for contractors.
Short-term projects
- Projects often require additional staff or specialized skills that won’t be needed after the project has been completed.
- Contract staffing allows you to ramp up for the project and then scale back down when it’s complete.