When there is short-term work to be done or expert skills needed for a fixed period, hiring a contractor can offer real benefits.

Fixed-term contractors or temporary workers are often better performers than those in permanent positions because of their exposure to other, bigger companies. They can bring those best practices with them.

Plus, they are specialists, which means they can offer unique insights and solutions to existing company problems.

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Pros of hiring a contractor

No long-term commitment

Hiring a contractor means you can have the skills you need without the commitment of taking on a full-time employee.

Saves you time and money

In the short-term, hiring a contractor saves you money: no PAYE or national insurance contributions, no paid sick leave, paid holiday or pension contributions. And there’s no need to provide an induction or probation period or performance appraisals. Nor is there any need to provide ongoing training.

More flexible

You can offer different types of employment contracts, such as part time (work a set number of hours per week or month) or fixed term (working for a set period of time, like covering maternity leave or on a project). You can specify when and how long you want this contract to last for. And using a contractor can be helpful when staff are off on public holidays.

Specialist niche skill

In a tightening jobs market, a contractor can offer specialist skills for specific projects which your full-time staff may be incapable of. Contractors usually have a very specific skillset and are accustomed to performing on very niche projects. Having a highly specialised individual on your team can really help advance your business.

Helping out permanent staff

Sometimes you may have special one-off projects that need more resource. A contractor can jump in as required, ensuring your full-time staff can stay focused on their day-to-day role.

Fast recruitment

Contractors are used to coming on board at short notice, especially when it’s all hands-on deck. Taking on somebody full-time however can take months. A medium to senior-level staff member will have a notice period of anything between three to six months.

Temporary cover

A contractor can cover for staff if they’re off on long-term sick leave, maternity leave or a peak-season holiday leave.

Budget certainty

Bringing in a contractor means you know how much you’re going to spend on a project or over a time period.

Fresh perspective

A key consideration this. Sometimes it just takes one outsider to completely change – for the better – the way a company does things. An external contractor brings a fresh pair of eyes to a problem and can suggest solutions without fear of internal politics.

>See also: Can a sole trader employ staff? 

Cons of hiring a contractor

Higher hourly rate

Contractors cost more per hour than an equivalent full-time staff member. Partly this is because they have to cover their own admin and pension contributions, as well as make up for not having any paid holiday. So, if you are going to be using them a lot, you could pay more than you save on running PAYE, pension contributions, paid holiday, etc.

Unavailable next time

With an employee, you have someone fully dedicated to your business. Whereas with a contractor, they might not be available the next time you need them if they have other clients.

Lack of control

As long as they deliver the brief, the contractor can choose how, where and when the work gets done. You have less say and control over the work because they should independently determine how best to complete the task. And that is often done remotely, so you have less oversight.

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