When you own a business or plan to start your own, hiring resources is one of the most important decisions you’ll have to make. It’s crucial to carefully compare the pros and cons of software contractors and employees or maybe a combination of both.  




  1. Helpful for short-term projects

Contractors are the best choice for short-term projects. It is especially convenient when a software expert with a specialised skill is needed for a specific project – hiring a contractor is easier and faster as they can be quickly replaced if you are not satisfied with their level of expertise. However, in many instances you can offer contractors permanent positions.

  1. Specialised experience

Software contractors tend to have a diverse skill set due to experience of working on various projects. A contractor with specialised software knowledge and experience is best for specialised talent, if this is what your company requires.  

  1. Overall cost is less

It may appear as though contractors are more expensive than permanent staff as they charge a higher hourly rate, but contractors do not receive holiday pay, pension or any other benefits. They are only paid for the hours they work, therefore making the hiring of contractors much more cost-efficient.  



  1. Retaining talent isn’t easy

Contractors are generally hired to work on projects. When the project is done, they are looking for the next challenge and are free to move on. As a result, if the company fails to renew the contract within a short period of time or if the job satisfaction is not high, the contractor may move onto the next best project.   

  1. High initial cost

The cost of initially hiring a contractor is higher than a permanent employee as contractors charge a higher hourly rate. Unlike permanent employees, contractors must also be paid for any extra hours they work. However, this should be weighed against the costs associated with recruiting and training a permanent employee (which is also considerably high).  


Permanent employees 


  1. Grow with the business

Permanent employees are at the centre of a company’s growth – without them, you will only have contractors on a temporary basis, which will be of little use to your company’s long-term growth. Well-selected and trained permanent employees will do wonders for a business.  

  1. Reliable

Over time, permanent employees develop a great understanding, passion and pride for a company’s values and goals. Their loyalty means that they are more likely to commit to longer hours if workload increases and step in where required. They can be relied upon for any urgent work without extra cost.  

  1. Less Restrictions

Companies have the advantage of having more control over permanent employees in relation to their schedule, working hours and the benefit of tailoring their working style. Less limitation allows companies to ask what they want of their employees (in line with their contract). 



  1. It is Expensive 

Hiring permanent employees can be more expensive in the long run. There are costs associated with recruitment, training and development, pension, sick leave and holiday pay. These hidden costs should be considered before deciding to hire permanent employees. 

      2. Finding great talent is a challenge

The recruitment process is both costly and challenging due to the difficulties in finding quality candidates for a particular role. Hiring a mismatch employee and not being able to replace them can be difficult.  


Contractors vs. employees: Conclusion 

It is vital that your company considers a suitable mixture of software contractors and permanent employees based on the priorities and needs of your business. Consider the nature of your projects, company goals and culture, in order to make the best possible hiring decision for your business. If the recruitment agency is good, they should be able to share insight on whether permanent or contract talent would be work best option.


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