What type of factors are involved when a hiring manager decides to continue paying a contractor/consultant or hiring them full-time? If it were strictly financial, it's a no brainier to me...thoughts?
Answers
Kevin,
I would think in terms of total compensation. The consultant might get $60/hr and that's it. That may actually be cheaper than paying someone $35/hr plus benefits.
Shipmate of mine is fustrated---I just can't figure the math. If a company pays a staffing firm 60/hr for a consultant how can they not want to pay a full time employee what equates to 35/hr. Could the difference be that substantial?
Often the reverse is true. Permanent employees can cost much more than contractors when you add in the cost of benefits, pensions, payroll taxes, workers compensation, etc.
Kevin, speaking from the perspective of a hiring manager ...
There are times when a company's expenses are tight, and hiring permanent employees is shut down. However, during that time, there may be expense dollars available to pay a contractor. Using contractors to do work gives the company the flexibility to add or subtract workers as the need grows or shrinks, without the processes of hiring and termination.
We have often kept a contractor on for a year or more, so that we have the flexibility to terminate the person when a project is completed.
The contractor may bring a specific skill which will be needed for a limited time period. When the skill is no longer needed, the contract can be terminated much more easily than a permanent employee can be terminated.
We also use contractors when we are not allowed to hire permanent employees, with the hope that when the financial situation improves, they can be hired as permanent employees. Using contractors allows the team to "test out" the employee prior to making the permanent hire commitment.
I hope this helps you understand your specific situation.
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