Businesses have made use of contractors to fill gaps in staffing or skills for centuries. Contractors are a flexible way for large and small businesses to get work done without committing to paying an employee over the long term. Clever use of contractors can save your business money and reduce administrative overheads. Here are five of the benefits of hiring contractors.
Contractors save money
Hiring a permanent employee implies expensive overheads – your net cost to employ someone is substantially higher than the salary that they are paid at the end of the month. Contractors often work off-site, saving you desk space and reducing the need for a large office. Employer-funded benefits such as pension funds also don’t apply to contractors – though they may demand a higher hourly rate so that they can make their own provisions.
Get a more diverse workforce
With contractors dipping in and out of work, you can benefit from a wider range of skills than you would if you kept to the same employees for years. Every worker has a different approach and contractors can bring outside insight into your company. Diversity is always good for creative thinking, and the different views of contractors can help you to see opportunities that you are otherwise missing.
Reduce your admin overhead
Permanent employees require various administrative tasks that need to be handled correctly, from tax payments through to disciplinary hearings when things go wrong. Contractors are much simpler to deal with, especially if you work with an umbrella company. An umbrella company can offer you help with IR35 requirements and will do an excellent job of taking care of paperwork such as contracts and invoice payments.
Contractors are more flexible
Many businesses experience periods when they are busier, with higher levels of demand for their services. Working with contractors is easier under these circumstances. Staff hired as employees build up rights to employment, so you cannot simply dismiss them when business demand drops. Unneeded staff can be a big drain on the profitability of a business, and this is why many managers pick contractors during busy periods to temporarily boost production capacity.
Hiring contractors is quicker
In contrast to permanent employees, hiring a contractor is much quicker. If your business suddenly needs a specific skill or unexpectedly won a large order, contractors are the best way to sharply ramp up your capabilities. A number of platforms exist that allow you to hire contractors almost instantaneously, but hiring a permanent staff member will always require an extensive search and selection process.
Clearly, there is a range of benefits to making use of contractors to get work done. In fact, some businesses function by using almost only contractors throughout their existence because they simply have to take advantage of the flexibility of contractors. However, for most businesses, employing contractors is simply an excellent way to meet higher-than-usual demand or to top up on a specialist skill that their permanent staff members do not have.