Contractors or Permanent employees?

Contractors x Permanent pic

Contractors or Permanent employees? 

It is often the case companies believe they have the universal right answer to that question. They can often be wrong. That is the case as there is not always a straight answer to the question – in the broader sense, of course.

The decision on whether to hire a permanent employee or a contractor should be based more on the situation rather than the company’s preference. Below, I share a few important aspects to evaluate before deciding which way to go.


Nature of the job

The nature of the job to be performed is one of the main aspects to analyze. Are you hiring someone to perform an activity that is within the company’s main focus or is It an accessory type of work?

Whenever the job is part of the company’s core activity/product and the knowledge necessary to perform it is of value, it is a good bet to explore a permanent hire. If the focus of the job is not part of the company’s main focus, it could be best to hire a contractor.

It is always better to develop and keep the knowledge around the heart of your company with you. Whenever it is an accessory skill, then a temporary specialized solution could be best.



Another important aspect to beware of before deciding which way to go is for how long that activity will need someone performing it.

It is safe to say permanent employees should always be the choice when you are looking into hiring for a recurrent/constant job. It is pointless to have a contractor perform activities that will always be needed within your organization. On the contrary, whenever you are hiring for a project with an end date or for an activity that will not be done for the long haul, a set term contractor could be the way to go.



Understanding the skills needed to perform the tasks you are hiring for are essential in deciding which route to take.

Are you looking for a broad knowledge person or for a niche specialist? Usually the more specialized, the more difficult to find (and the more expensive it will be). That is a sign that a contractor could be the best choice. That way he/she can solve your immediate problems and capacitate/transfer knowledge to one of your less specialized employees to take over once he/she leaves.



Understanding the nature of your budget if key to deciding between a contractor and a permanent employee.

If you are ticking all the previous boxes in “permanent employee” but are unsure of how another person on payroll might affect your medium and long term budget allocation, you could hire a contractor to test it. Whereas the cost could be different, it gives you an opportunity to evaluate how much of a financial impact an extra person would produce, versus the overall production relief of having an extra pair of hands.

You can always offer the person a permanent position down the road or decide to not renew the temporary contract, one way or the other.



How quickly you need someone in a desk, working at your company is also paramount to choosing which way to go.
While your need might be for a permanent employee, the time to process and pick the right person could be longer than what you need for having someone working and solving your problems. If that is the case, you could look for an immediate short term solution in a contractor, while you take your time choosing the right person to perform that job permanently.