Contracting or Permanent Hire? 4 Key Questions For Hiring Managers.

Mark Freire

24th May 2017

At JITR we have both dedicated permanent hire and contracting teams. This puts us in a unique position to offer independent advice for every client on which solution will best meet their skill requirements.

Currently there is no doubt that many skills within the IT & digital market are shifting towards contracting. We are seeing more high level candidates embracing the potential benefits of becoming a contractor, and moving away from permanent employment. However there are still high calibre individuals looking to get involved in a business and make an impact through a full time job.

This means that employers need to be flexible in their thinking. Over the last year, we have spoken to companies who have insisted on a permanent hire and then been stuck while key projects are put on hold. Likewise, we have seen companies jump to successive short-term contractors when securing those skills permanently in-house at a better rate would have been a smarter decision.

So how do you decide if contracting will work for you? Here are 4 key questions to ask yourself.

What skills do I need?

In our current skill short market, many highly skilled candidates have or are switching to contracting for higher earning opportunities and better work/life balance. This means that you are likely to find the skills you need in the contracting market – but they come at a cost. Not only will it be likely that contracting will cost more on a day-to-day basis, but those skills will not be secured within the business or passed on so effectively to other employees in the same way as a permanent employee.

Having a strong understanding of which skills you need, how long you need them for, and the direct financial benefit of having those skills for the business will help with decision making – as will consulting with your own network or a specialist recruitment agency who knows the skills currently available in both the permanent and contract market.

How flexible do I need to be?

Contracting gives your business flexibility as your commitment is limited to the duration of the contract. There is also often the option to extend or switch to permanent should the relationship work for both parties.

However, should your project requirements suddenly change then contractors are likely to be less flexible about changing the terms of their engagement. While many permanent employees are used to sudden shifts in business priority or being transitioned to different projects, a contractor is much more likely to hold you to the original brief. This can mean a renegotiation, a costly break in contract, or the search for a new contractor if your plans are prone to change.

How much time do I have?

There is no doubt that taking on a contractor is a faster hiring process. We have previously filled contractor roles within the week. However, the key to getting the best from this market is to anticipate your need. Quality contractors won’t leave existing assignments, so early planning means that the market can be mapped for your needs. The advantages of quicker hiring are not just in the hiring process. Experienced contractors will be used to hitting the ground running and delivering value as quickly as possible. Permanent employees, on the other hand, will usually have an induction process and take some time to find their feet and deliver value in a new work environment.

If you are looking for a quicker permanent recruitment process, then ask us about organising a hosted interview. Depending on the scarcity of the skills you need, we can get a range of candidates together to interview and test within a single day – providing a more efficient way to locate and view the strongest permanent candidates currently available.

How will the existing team feel?

If you’re new to contract hiring, then consider how your existing staff will react to working with a contractor. A faster hiring process and shortened induction time means contractors have limited opportunities for company integration. They also tend to have a focus on ‘getting the job done’ rather than building relationships with existing staff. Add to this that a contractor will likely exist outside of your internal company structure and you may find some tension and arguments about who calls the shots.

Alongside you hiring plan, make sure you have a clear internal integration plan to clear up the details and ensure a smooth ongoing working relationship.

Lastly it can be worth sparing a thought for whether introducing a contractor into the mix can make existing staff review their own work choices. If you negotiate significantly different work terms and rates for your contractor, then don’t be surprised if your best employees start asking questions regarding their own employment terms.

Contracting or perm – need some independent advice? JITR have both dedicated permanent and contracting teams to provide you with the best options for the skills you need. Contact us to review your options.