Advantages of Using IT Contractors Instead of Full Time Employees

In-house vs Contrators, SysminBusinesses are increasingly turning to IT contractors to fulfil their information technology staffing requirements. This is happening for a number of reasons, but mostly because of improved productivity, flexibility and cost savings.

The trend is expected to continue in developed countries with the software company Intuit reporting that by 2020, 40% of workers in the United States will be contract staff. Here are the main reasons why IT contractors are increasingly being used by businesses in 2015.

Contractors are Cheaper to Employ than Full Time Employees

Despite the fact that the hourly cost of a contractor is sometimes more than a full time employee, you save money due to a number of factors. Consider the following savings:

Wages can be Cheaper

Thanks to the globalization, you can outsource IT services to contractors all around the world and take advantage of exchange rates. Global labor markets can also differ greatly in terms of supply and demand for workers. If the city where your business operates is experiencing a labor shortage, you could use an IT contractor from another part of the world.

Employee benefits and contributions

Depending on where you are located, there are a range of contributions which businesses are required to pay for each employee. In Canada, employers make contributions to employee’s retirement funds (CPP payments) and health benefit funds. Those costs can be avoided by using a contractor. Additionally, contractors don’t receive sick days, holidays, long service leave or overtime.

Office Space and Equipment

Contractors often work remotely and have their own equipment. A full time employee may require office space, a computer, a telephone and access to utilities. These expenses are usually not incurred when using a contractor. A contractor is also responsible for the cost of their own training, permits and professional licenses.
Insurance, Taxation and Lawsuits

There are costs associated with employee insurance and taxation management. You won’t need to insure a contractor and you won’t need to deal with their tax arrangements. A contractor is not subject to the same labour laws as a full time employee. There is also less likelihood of a racial discrimination, wrongful termination or sexual harassment lawsuit with temporary contractors. That means there are less potential lawsuits should an issue arise in the workplace.


A Business has More Flexibility and Productivity with Contractors

Using contractors helps your business quickly adapt to changing market conditions and workforce requirements. A business can quickly adapt to the requirements of new projects by using contractors with appropriate skills for the projects.

productivityMaintaining Productivity
If you have full time staff on the pay roll, you need to ensure they have adequate work to perform and are doing so productively. On the other hand, you only need to hire a contractor when there is work available. It is also in the contractor’s best interests to be very productive given their temporary nature and payment terms.

If you take on a contractor who is not a good fit for your business, you simply don’t hire them again. If you hire a full time employee who is a not a good fit, it can be more costly and difficult to fire them.

A high-quality contractor will also be able to work independently and does not require any overhead. Once a contractor has received a brief with deadlines, they can often work without guidance until the job is complete.

Hiring for Skills
Contractors are also very useful for employers who have a short-term project that needs a particular skill set. According to Forbes “Because most ICs bring specialized expertise to the job, they can usually be productive immediately, which eliminates the time and cost of training.” Therefore, instead of hiring a full-time employee simply because they have the narrow skill set that a business temporarily needs, a contractor can be used. The cost of training a full-time employee for a short-term specialized task can also be avoided by using contractors.

Tailoring Workforce to Suit Requirements
For businesses who have fluctuating workloads, contractors can be incredibly useful. If your business experiences a slowdown, simply hire less contractors. There isn’t a significant cost involved in firing and hiring staff, as there would be with full time employees.

About us

Sysmin provides IT administration services for small to medium sized business. We operate throughout Toronto, Canada and surrounding areas. Contact our friendly staff today to discuss your information technology contracting requirements!

Intuit 2020 Report. (2015). Retrieved 7 May 2015, from
Pros And Cons Of Hiring Independent Contractors (2006).