A high-performing team hinges on your ability to structure said team effectively so you can deliver the results your stakeholders expect. No pressure.
The upside? You have options as you look to fill gaps in your group. Namely, you get to decide when to hire employees vs. contractors or temp workers (anyone who doesn’t work directly for your company).
To help you spot which scenarios call for a contractor and which lend themselves to an employee, take a look at the three considerations detailed below. You might be surprised by the many cases that beg for a contractor.
1. What Are the Business Drivers Behind Your Need To Hire?
The first step to an effective hire is analyzing the business drivers or goals behind the need to augment your team. We see a few common drivers:
- Planned improvements
- Increased demand
Each business driver comes with its own circumstances that can clue you in on when to seek a contractor vs. an employee.
A planned company or team improvement could be a project like moving your applications to the cloud. First of all, this is a short-lived effort. Once you migrate your applications, the project is over. The duration of a project, as we’ll detail below, is always a helpful indicator of who to hire. A planned improvement will usually call for a contractor because of its temporary nature. Why hire an FTE when the project will end?
In our cloud migration example, you can see how bringing on a temp cloud engineer would be the ideal solution to your staffing needs.
Sometimes your team is tasked with launching a new product or service, thus expanding your offering. In terms of who to hire — contractor or employee — to support an expansion, this one could go either way. Let’s say it’s a new product that’ll be a permanent part of your lineup. You’re probably better off with a full-time employee to support the continued growth of the product.
On the other hand, we had a client who created a newsletter for Gen Z readers. They weren’t sure if the newsletter would be a success. Bringing on a contractor to run the newsletter, at least at first, would be a smart choice in this instance. If the newsletter flopped, no harm, no foul. You wouldn’t have to let an employee go. Now, if the newsletter were a hit, you could consider bringing on your contractor full-time.
As you likely know, this is called “right to hire,” wherein you seek out a contractor who you can eventually turn into an employee. RedStream is happy to assist you in deciding if right to hire is your best option, and in finding right to hire contractors for your team.
Typically, increased demand for a product or service that impacts your team’s bandwidth is a clear-cut case for contracting. Let’s look at an example.
Say it’s the holiday season. You know the volume to your call center will be busier this time of year, but it’ll cool off when December’s over. Bring on contract workers to bolster your call center for a month or two, problem solved.
2. What’s Your Staffing and Larger Budget?
Of course, you can’t get around considering your budget as you make hiring decisions. In today’s economy, your budget is probably pretty tight. Contracting can be your best friend until times are easier.
Why? Because contract workers are handled as an accounting expense…a simple line item in your budget. Meanwhile, hiring employees comes with loads of complications due to withholding liabilities, employer tax expenses, state-level filing requirements, benefits offerings, training and other HR regimens, and so on.
Contracting isn’t just a simpler option when your budget won’t budge. It’s also a great choice when you need someone to start, STAT. You don’t have to jump through those HR and other compliance hoops to get a contractor going on your team.
3. What Are the Practical Realities of Your Company and Team?
Beyond business drivers and budget, there are plain practical and logistical details to consider when recruiting and hiring. Two come to mind: project duration and company/team location.
We touched on this already, but it bears repeating. The simple fact of how long an initiative will last plays a huge role in who you should hire. If a project has an end date, go with a contractor.
You should also think about the career path of the role you’re looking to fill. If your opening doesn’t fit into your (or any) advancement model, a contractor will probably do. You don’t want to bring on an employee who can’t progress in their role.
Besides, tapping a contractor instead of an employee gets you out of doing reviews and answering questions about career progression. The length and description of the contract is known to both parties.
Does your company or team have a location strategy? It’s not uncommon for companies, especially tech companies, to require all employees on a certain team to be centrally located, even if they work remotely. Atlanta, Columbus, Houston, and even Salt Lake City are hubs for firms with these location strategies.
If you want to open up your talent pool past a particular geographic area, contracting could be the answer. It’s often easier to gain an exception to your location strategy for a contractor as opposed to an employee.
Temp or Permanent Hire, We’ve Got Your Back
Unique hiring goals, lack of experience with contracting, budget restrictions, specialty skill needs — at RedStream, we’ve seen it all. We can help you augment your staff — with contract workers and/or employees — regardless of the circumstances.