Written by Joanne Sacco

The Pros And Cons Of Hiring A Permanent Versus A Contract IT Employee

Digital businesses require a multitude of staff with a vast array of skillsets and experience. And due to the nature of the industry, staffing needs are constantly changing. That’s why it’s sometimes difficult to determine your best employee fit – a permanent staff member or a contractor?
To assist you in making that decision, consider the following pros and cons of hiring permanent employees versus contractors.


The Pros

Subject Matter Experts

The digital industry is filled with niche contractors. When you need to plug a gap in your project at short notice, a contractor is an ideal solution. They come to you perfectly skilled up in your area of need, and ready to go.
Furthermore, by their very nature, contractors are exposed to a wide range of companies and projects. This enables them to develop a store of expertise and insider knowledge about industry trends, competitors, innovations, and best practice processes; things that are supremely valuable for your business.

Affords You Flexibility

Every tech business has unique needs. Some have a constant supply of work in their pipeline, while others experience an ebb and flow. If you’re in the latter, a contractor makes good business sense, as you only pay for the work when you need it, forgoing the need to cover holiday and sick pay.
As contractors are also role-ready, the lead-up to getting your project underway is considerably less than with a permanent hire.

An Opportunity To Try Before You Buy

Hiring a contractor can be likened to a test-drive – you have the chance to see if their skills and personality offer your business a smooth ride (or quickly become a roadblock) before making a full-time commitment.
If you discover they aren’t the best fit for your team, it’s much easier to end or choose not to renew their contract. But if they are a good fit, you’re in the driver’s seat to offer them a permanent position.

The Cons

Less Security and Perhaps, Loyalty

Contractors can – and do – move frequently from job to job. Just as you can end a contract early, they can choose to leave, particularly if a better prospect comes their way. This can leave your project in dire straits.
Another disadvantage is that many contractors aren’t paid to become thoroughly invested in you as a company. They might view your project as simply a pay check, never achieving the same level of loyalty and dedication to your business as a permanent staff member.

Can Be A Higher Cost Outlay

Typically, contractor hourly rates are considerably higher than those of their full-time counterparts. This is mainly due to the fact they aren’t paid any leave entitlements. If the work you require is long-term, you may end up paying more than if you were to hire a permanent staff member.

Not The Best Fit For All Tech Positions

Many contractors have a deep technical knowledge in one certain area. If your open role requires someone who is flexible enough to juggle multiple work processes, a contractor might not be ideal.


The Pros

With You For The Long Haul

Bringing on a permanent team member gives you the chance to fully induct them into your business, helping them understand not only the company at large, but their role within it. Staying with you for the long-term means greater stability, greater engagement, and a much bigger dose of employee loyalty too (provided you onboard and treat them the right way).

The Chance To Build A Tight-Knit Team

As most digital work is team-based, it’s vital you nurture relationships within yours. A permanent employee is more likely to put effort into developing professional relationships, knowing full well how important it is to both their career, and happiness level at work.

The Cons

The Fast Paced Nature Of The Industry

With innovation and change in the digital sphere forging ahead at rapid pace, there is a risk permanent staff can get left behind. This can be addressed by investing in the right training, but it will take time and money. Consider if that’s something you can afford to do.


Over time, you may find your permanent staff become disengaged. There are a host of reasons why this can happen, many of which can be addressed, but most involve some serious managing on your side. The risk in not doing so can be a steep decline in productivity, and your ability to hit those project deadlines.

The Risk Of A Bad Fit

A permanent employee’s recruitment and induction process is generally longer than for a contractor. So it’s reasonable to surmise you want to ensure you get the best fit for your permanent role.
But recruitment mistakes happen. Whether it’s uncovered months or years down the track, your bottom line suffers, especially when you have to engage in the process all over again. With contractors, a less-than-ideal-fit can come to light earlier, and rectifying it might be easier and less costly.

Contractor Or Permanent – Which Way To Go?

As you can see, there are multiple advantages and disadvantages in choosing full-time or temporary staff. But ultimately, you should be guided by the role requirements. Specifically think about these three key things:

  1. The project stage
  2. Whether you need long-term expertise
  3. How important it is to retain knowledge in-house

These factors should help you come to the right decision, but if you need some extra assistance, consider the benefits of using a recruitment agency, such as Finite. With over 20 years in recruiting and placing permanent and temporary IT professionals, we’re in the box seat to help you evaluate your role, and source your best digital fit.

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