The shape your hiring strategy takes, whether you are building an IT or any other part of your organization, is frequently determined by one key question: should I hire permanent staff or use contractors?

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Both types of workers have roles to play in the modern organization, and both may be useful to your company in specific positions and at various times. It is a matter of analyzing the advantages and drawbacks to determine which is the best fit for your organization or a specific function within it.

With that in mind, below are the pros and cons of hiring contract vs permanent employees for your vacant IT positions.

Pros and Cons of Contractors

The popularity of IT contractors has skyrocketed in recent years. The rise of the gig economy, increased demand for particular skill sets, and escalating talent shortages have converted what was previously a tiny group of highly specialized employees into a legitimate core hiring choice. More individuals than ever before are quitting their jobs to become their own bosses, with so many choosing freelance employment over working for someone else.

With so many IT contractors accessible today, the issue has shifted from “can I hire a contractor?” to “should I?”

Pros:

1. Cost Savings

Cost savings: While contractors sometimes charge a higher hourly rate, the upside is that you simply pay for what you need when you need it. They are usually not eligible for a variety of employee perks such as vacations, office equipment allocations and subsidies, and other benefits, all of which cost money. They also require less onboarding, training, and administration than permanent staff, making them appealing from a cost-saving standpoint. It is also quite easy to find IT contractors with all of the great IT recruiting platforms and companies out there.

2. Greater adaptability

IT contractors allow organizations to be more flexible in their recruiting. They can fill a short-term labour shortage (e.g., maternity leave), provide access to a unique skill set (e.g., cyber-security specialist), and can be onboarded and withdrawn rapidly. Flexibility has been critical for organizations to stay afloat, especially in recent years, boosting the demand for contractors.

3. Less supervision

IT contractors with experience need less management than permanent staff. In most circumstances, a role briefing and a project deadline are all that is required to get an experienced IT pro up to speed. Hiring top contractors eliminates the HR headaches associated with permanent workers, giving you more time to focus on other aspects of your organization.

Cons:

1. Less company loyalty

Contractors are typically mercenaries in the workplace when it comes to loyalty. They can work for many companies at the same time and usually gravitate towards the highest bidder. This means there’s no assurance you’ll be their first priority or that they’ll be as focused and engaged in performing at the same level as a more accountable permanent employee would be.

2. Less authority and control

To attempt to manage your contractors, you might create standards, criteria, and deadlines. However, because they are more independent and operate using their own tools, methods, and resources, you will unavoidably have less control over them. As organizations become more concerned about issues such as cyber-security and competitiveness, keeping this control is a major downside when hiring IT contractors.

Pros and Cons of Permanent Employees

Traditionally, job seekers have favored permanent employment because it provides a sense of belonging and security, both financial and psychological. Taking on full-time workers, however, is a huge commitment and obligation for organizations. The company must support this individual professionally and financially during their tenure as well as accept the risks involved when investing so much in someone. This makes the decision on whether or not to hire permanent workers important.

Pros:

1. Greater stability

By recruiting full-time IT personnel, you build a strong and committed team that collaborates effectively. You can develop and hone their skills with an eye to business and organizational objectives and it is more likely that they are involved and engaged in order for your firm to succeed. An over-reliance on contractors, on the other hand, can undermine team cohesiveness and negatively influence performance.

2. More control

Hiring permanent IT staff gives you more control over your company. Everything is kept in-house, making it easier to manage workloads, guide workers, and keep sensitive information protected. Permanent workers are more involved in and focused on organizational goals, whereas contractors may have conflicting loyalties.

3. More organizational knowledge

Over time, a permanent employee will amass an in-depth understanding of your company and its stakeholders. This information becomes important over time and aids in the efficient, effective, and smooth operation of enterprises. Contractors are frequently not in organizations long enough to have such experience.

Cons:

1. A Sizeable Investment of Time and Money

Hiring, onboarding, training, and keeping permanent employees are all expensive processes. Paying wages, taxes, insurance, office expenses, continuing mentorship, professional development, and performance assessment programs all add up to a sizable sum. In a perfect world, these expenses would be considered an investment and would be repaid with interest, but this is not guaranteed. If a permanent employee goes, that’s a lot of money down the drain, not to mention expertise and cultural understanding.

2. The Cost of a Bad Hire

Hiring a poor match for your company on a long-term basis is costly. Bad people decisions have a negative effect on culture, engagement, performance, and productivity, all of which cost time, money, and resources. It might be difficult to fire a permanent employee once they have completed their probation period (and expensive if done incorrectly). In these cases, you must restart the recruitment process from the beginning.

Conclusion

Hiring the right IT staff is an operational necessity for an increasing number of businesses, given the complexity of network infrastructure, the amount of third-party software and applications involved in running a modern organization, and the ever-present and ever-growing cybersecurity threats.

There are essentially two different ways a company can go about building their IT staff: full-time staff or contractors. It is important to understand the pros and cons of each avenue, and to measure them against desired business goals and objectives.