When you have several big projects coming up or a headcount has opened up, should you hire a contractor or get a new employee? Is your workforce scaled for growth, or will it remain steady?

What is a contractor?

Contractors are independent professionals or businesses who offer their services to other companies for a set fee over a fixed period. They are hired by other firms to complete a function over an agreed period and are not employees of those businesses.

They can be a one-person operation or can be part of a company that manages contractors. Contract workers negotiate their own fees and working arrangements, and can work for more than one client at a time. They are also sometimes called freelancers or temporary workers.

Related: Debunking the biggest myths about contract staff

How does hiring a contractor add value to your business?

A contractor does more than plugging a gap for your business. When you tap into the expertise of contractors, you are helping to grow your business too.

A fresh perspective and access to skills

While you may hire a contractor for a specific project or as a stand-in for staff on extended leave, contractors can bring a fresh outlook based on their experiences at different workplaces.

“Experienced and specialised contractors have a wealth of experience across different projects, companies, and industries,” says Marlinda Zulkifli, Head of Page Contracting Malaysia. They bring new ideas and introduce new ways of working to your team, enabling your existing staff to learn and think differently.

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On top of that, contractors are motivated to succeed as they build their reputations through their projects. They are results-driven, and positive feedback will help them get more projects in the future.

Lower overheads

You don’t need to provide employee benefits like employer taxes, medical bill compensation, transport allowance or pension for contractors. And therefore, hiring contractors is more cost-effective than hiring permanent staff.

Related: 7 strategies for HR leaders to navigate periods of change

When should you hire a contractor?

Aside from filling in for full-time staff on extended leave, contractors are suitable for seasonal projects requiring more personnel. If you are testing a campaign where demand is uncertain, hiring a contractor would be appropriate as well.

If time is of the essence, you could consider hiring contractors first. Contractors or temporary employees can help fill the gap and provide an interim solution. This arrangement would afford you time to decide before recruiting the right full-time candidate.

However, if you are looking to build a team, having contractors would not be suitable. This is because you want to create stability in the team, and using contractors to fill vital gaps can distract new staff.

Contractors are short-term hires, and you should not rely on them to help you develop the business. While temporary employees can add value to your company, they do not add to the core value of the business in the long run.

So, if you find yourself extending the contract of your contractors, again and again, that would be a telltale sign that you most likely need a permanent staff for that role. Nonetheless, having a network of reliable, skilled contractors on your contact list is essential in the event that you need extra help.

Looking to work with contractors? Contact our recruitment consultants to connect with the top contractors in your industry.

Read more:
How does Michael Page attract the best talent for your business?
5 interview questions to ask to tell a great candidate from a good one
Why an effective onboarding process is more important than you think

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