When opening a spot on your team for a newcomer, it’s important to consider a multitude of factors: budget for the role, the time it may take for the candidate to ramp up and tackle a learning curve, how their personality will fit with the rest of the team, etc. It’s also important to consider whether a full-time permanent or contract hire is the best choice for your needs.
First, what is a contract hire? A contract hire, or contingent worker, is an individual hired by a company to complete a task or project for a set fee within a defined timeframe, rather than being a full-time employee on the company’s payroll. On the other hand, a permanent full-time hire is someone hired by a company for an ongoing position with no set end date, who receives company benefits like health insurance and paid time off.
While each are valid options, they have their pros and cons. It’s best to partner with an agency like Market Street Talent who can assist with and share proven insights on both.
Contract Hires—the Good
Contract employees can be an effective way to augment your team during times of increased workloads or looming deadlines. Often, they allow you to quickly scale up (and, when needed, scale down) without the same time commitment as a full-time hire. Severance and layoffs are also out of the picture with contract hires, as they are technically employees of the agency that placed them and are considered at-will workers. The agency is responsible for providing benefits (optional) as well as paying unemployment insurance and taxes, which means more cost savings for you.
Need more convincing? Contract workers can provide access to high-demand, niche technical skills that are essential for project-specific needs. Full-time employees may not have the expertise required to tackle urgent or specialized projects. Contract workers also have a far shorter onboarding process – with their agency handling all onboarding and HR paperwork.
Contract Hires—the Bad
Contract workers can sometimes be more likely to leave when a more lucrative project arises, and as they leave, knowledge retention becomes a challenge. They can “take the knowledge with them,” meaning you must start all over with a new hire.
Contingent labor can also be less invested in company mission or culture, as they may see themselves as a short-term team member. This means they could be less likely to build long-term relationships within the company or see themselves growing and advancing from within.
These pitfalls can be avoided by ensuring contract workers are paid fairly for their work, are passionate about and invested in what they are doing, and are welcomed and recognized by the team.
Full-Time Permanent Hires—the Good
Full-time permanent hires can be a good option when you’re looking for consistency and long-term value. As they are hired with no end date in sight, they often retain institutional knowledge and skills, which can be vital for project continuity and long-term growth. They can also be more invested in a company’s mission and values, as they feel immersed in the culture by receiving full benefits. Employees who feel like part of the team and part of the company are more likely to stay longer, which reduces turnover. Staying longer means you are able to position them for leadership roles and promotions, which can continue to build internal knowledge transfer and long-term success.
Full-Time Permanent Employees—The Bad
Full-time permanent hires can cost more, with benefits and overhead costs falling directly on you (including workers’ compensation, payroll taxes, unemployment insurance, etc.). If a poor hire is made and they are let go, it can, therefore, be more of a financial hassle to replace them than it would be to replace a contractor. It is also more difficult to downsize a workforce made up of full-time permanent workers, as layoffs require unemployment claims or severance.
Full-time permanent workers may not have the same niche technical skills as contract workers (or, if they do, they may be too expensive to onboard). This means investing in training, which can extend onboarding and project timelines.
Hiring full-time permanent workers is also usually a lengthier, costlier process than for contract workers, as they often require more screenings, interviews, and internal onboarding. Partnering with an agency like Market Street Talent can help keep this time to a minimum, as they pre-screen all candidates and provide access to a deep talent pool for open roles.
The takeaway
Contract workers and full-time permanent employees can both act as valuable assets for your organization and team goals. Market Street Talent is a trusted IT and digital marketing recruiting agency able to provide project-based staffing, contingent labor, and direct hire placements.
Connect with us today to learn more about what works best for your current needs, and how we can help you meet your hiring goals—on time and budget.
