A great many before me have discussed the merits pro and contra using contractors instead of perm contracted staff.
I will still give it one more go. Since lately, there has been some back and forth again about motivational issues and how certain is one in one legal contract situation compared to the other hence how motivated can one be and why the need to cater to so different audiences as ‘manager’.
The thing is
It doesn’t matter:
When investigating the differential motivators, one invariably ends up with the same motivators, and much the same demotivators (nicely depicted here of course still going strong, since tout a continué).
This, coupled with:
- Financially, you’ll have to pay for income taxes (buy side yes), holidays, sick days, etc.etc. (welcome to Europe!) and all of the administration surrounding that when you hire someone on a perm contract. If you hire a contractor, not so much; all costs are for the contractor
- You’ll also have to pay for continued education and a company car for perm contracters. For contractors, not so much; all costs are for the contractor
- Add in a ton for pension contributions (we’re still in Europe). For contractors: Nope.
- How about severance packages? (Oh, shouldn’t differ much…)
- Going through the calculation motions, it is little wonder that fully loaded costwise, a perm contractor will cost you 2,5-to-3,5 times per hour what a contractor bills you
- And your perm contractor is scientific reasearch confirmed actually productive for four (upper bound) to two (lower bound) of any eight-hour working day. Your contractor can only bill you for two hours slippage per day, at most
- You can even expect to pay more for the above motivators when dealing with perm staff. Contractors behave more mature and don’t need as much of everything
clearly leads in one direction. Isn’t there a catch ..? No, only if you’re Mr Tax Man; then, you’re the one losing out. Otherwise, you as an employer can gain seriously even when paying out ‘huge’ hourly rates to contractors.
Your comments, please.