IT Contractor or Full-Time Employee? 6 Key Points to Decide Your Next Hire

IT Contractor or Full-Time Employee? 6 Key Points to Decide Your Next Hire

As we discussed recently in our Guide to NY IT contractor rates eBook, the current job market is far too competitive for any part of the hiring process to be shortchanged. Any misstep or process fumbled in the execution can end with a candidate being hired elsewhere.

That’s why we always recommend that our clients seriously consider the type of employee they need. The decision between an IT contractor or full-time employee deserves more consideration than it is usually given. Here are the main factors to consider when deciding between different types of employees.

Cultural alignment: Engaged employees are important to any business – an engaged employee's workplace productivity has been measured at 22% higher than the average – and cultural fit is a considerable contributing factor to that sense of connection. What often gets overlooked is that both full time employees and contractors should have some level of cultural alignment.

Can they mix and seamlessly collaborate with current team members? Do they excel in working conditions similar to that of the position? Are their values aligned with the company’s? Any type of employee, be it full-timer or contractor, needs to answer in a way that fits the prevailing cultural criteria.

Short-term projects: Most businesses have no difficulty gauging which projects will last a few months. Web redesigns, infrastructure upgrades, and the translation of desktop apps into web or mobile platforms. Each has a finite end point and can benefit from a highly qualified IT contractor.

Yet longer projects running two or more years with evolving parameters can be equally well-suited for IT contractors. In fact, unless a specific role is something that can be guaranteed as an ongoing project, a contract employee is always a strong option.

Niche skills: How integral is a given technology to your team? Does it get used every month? Every week? Every day? Or is there an isolated range where once it’s been used, it will never be used again? Frequency and prevalence matter. Most contractors will have worked on several different projects, meaning they often have acquired skills that fit a broad field of work as well.

Increased volume: Though it is possible for a long-running business to predict some of its workload by the time of year or other measurable cycles, an influx of new or unexpected projects can put a strain on existing staff. Rather than exhaust the team until the workload subsides or hire someone who will quickly become an excess, hiring an IT contractor is often the best choice.

Hybrid positions: Is there a position that is difficult to put in a neat and tidy box? Does it combine several disciplines in one person? An IT contractor is one solution to this hybrid type of position, but an IT professional with such diversified skills might become too critical to your operation to let go. If there might eventually be opportunity for promotion for such a multi-talented person, full time employment might be the best route.

Employee costs: Price is definitely a consideration when deciding between hiring a full-time employee and a contractor. At a glance, the upfront pay rate of an IT contractor is going to be higher, yet full-time employees are typically more costly in the long run. Half of a full-time employee’s FICA taxes (Social Security and Medicare) are expected to be paid by employers. Additionally, the Affordable Care Act has made it mandatory for any business with 50 employees or more to provide some level of full-time employee healthcare coverage. None of those expectations exist when you employ IT contractors.

For those businesses that need further assistance deciding between full-time employees and IT contractors, our Guide to NY IT Contractor Rates eBook is an excellent resource. It contains competitive pay rates for mid to senior level IT contractors in the New York metropolitan area and can help determine which option is better for your business in the long run.