How to Tell If You Need a Contractor or a Full-Time Hire

When making hiring decisions, it can be difficult to navigate the difference between contractors and full-time hires, and to know which one is best suited to your needs. Contract workers are becoming an increasingly large part of the workforce—more of a go-to for hiring than ever before. Understanding the differences between the two classifications, the positives and negatives associated with both, and the circumstances under which one might be more appropriate than the other for your business, is essential. Consider this your guide to determining whether you need a contractor or a full-time hire.

Finances

One of the big differences between contract workers and full-time hires is cost. Deciding between a contractor and a full-time hire is often decided based on financial resources. For obvious reasons, full-time employees cost more money. They are guaranteed a set amount of hours, and are usually provided with health insurance, vacation time, and worker’s compensation for any injuries sustained. Additionally, you’ll have to pay payroll taxes for all full-time employees. Because these benefits are not provided to contract workers, they are much less expensive.

While contract hires won’t work for every business’s needs, a contract worker might be the right choice for your company depending on the amount of money you can afford to allocate for the work you need done. However, it is imperative that you always correctly classify your employees. If you are hiring someone to do full-time work but classifying them as a contract worker, you can incur serious financial penalties, and actually lose lots of money in the long run. The Canadian government is strict about employee classification, so it’s important that you’re familiar with the classifications.

Specialty

Another key difference between contract employees and full-time hires is their degree of specialization. While a full-time hire will have a variety of applicable qualifications, contractors will usually have a specialized skill that makes them the optimal choice for carrying out a specific job. When debating whether you need a contractor or a full-time employee, you should take into consideration the degree of specialization that the role requires. If the role demands a more general skill set, or a skill set that can be attained with a limited amount of training, then a full-time hire might be the right choice for you. If the role requires a very specific skill set that requires specialized training, then a contract worker is your best bet.

Corporate Culture

Contractors tend to work much more independently than full-time hires. They might work for a separate company that supplies contractors for a specific job, meaning that they don’t necessarily consider themselves as an employee of your company. While this has no bearing on the quality of the work contractors provide, it might affect your decision, especially if a strong corporate culture is a priority to your company. Full-time employees will contribute more to the corporate culture of your business, and are more likely to feel personally invested in their work, and in your corporate values and goals.

Time Commitment

Finally, another important thing to consider when deciding between a contractor and a full-time hire is the time frame associated with the position you are looking to fill. If you’re looking to fill a position that could potentially go on indefinitely, then you should consider hiring a full-time employee. Contract workers are hired to work for a specific, and usually short, period of time. If you know that the job you need completed will only take a year, for example, you should consider a contractor. If you were to hire a full-time employee in that situation, you would still be obligated to provide them with work once the original job was completed, which may not be to your advantage.

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Trevor Breininger

Trevor Breininger

Trevor brings experience in both recruiting and business development to his role as Business Development Manager at Ian Martin. He knows the industry from both a recruiting and an account management perspective and would like to communicate what works best to clients. As an avid reader, Trevor reads everything from industry related books to science fiction. He also enjoys getting outside and enjoying a beautiful day on the golf course.
Trevor Breininger