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Contractor vs Full-time Employment Which Is Better for Software Engineers?

Have you decided that contract-to-hire employment is right for your business, or need additional guidance to reach a conclusion? Get in touch with our staffing experts today and experience the 4 Corner Resources difference when it comes to filling your contract-to-hire positions. If you feel like you need that additional time to assess an employee’s skills and personality before committing to a full-time arrangement, contract-to-hire positions may be a solution for your hiring needs.

As a contractor, only the employee portion of FICA taxes comes out of your wages. Your staffing agency or employer of record will handle your payroll taxes, thereby “increasing” your earnings in the long run compared to 1099 employees. Therefore, they are provided with more legal protections than part-time workers. Full-time employees can be salaried employees, meaning they receive a fixed payment either weekly or twice per month, based on their annual rate of pay. Contract employees are also called freelancers, gig workers or consultants.

Building Better Businesses

Many companies seek this knowledge or skill set for specific projects or assignments, even if that means using these contractors for the short term. Harman noted that employees are hired to perform specific work at the employer’s direction. On the other hand, independent contractors are typically given a job or project to work on without the company controlling when and how they do it, he said.

With a temp position, you do not have the stability of a full-time position, though even permanent employment can end abruptly without notice especially in a down economy. You also have the flexibility to opt out of work for weeks or months if you choose to. In this manner, you may choose to grind for a month and take the consequent month off. Contract workers also can work remotely or from the premises of an office that isn’t managed by the company they are working for. However, if the work requires on-site work, the details are sorted while drafting a work contract.

Contract-To-Hire Versus Direct Hire

From the initial training to refresher courses, companies invest heavily in their full-time employees to motivate them and sharpen their skills. The good news is that they can choose the training that will enhance their marketability and earning power. If you decide to offer your contract workers health insurance, it could hurt your bargaining power with the health insurance company. You probably have a discounted bulk rate from the health insurance company because you have many employees with long-term health insurance plans. Contract employees are typically only there for a few months, which complicates things.

As a recruiter, your role is to show candidates the advantages of contract work. Annually, staffing agencies hire nearly 16 million temporary and contract workers. Employees are exposed to new work and training opportunities by accepting contract positions. Most employers who hire full-time workers are responsible for staff training.

What Do Employers Need to Consider when Hiring Contract or Full-Time Workers?

For a small business, working with contracted and full-time employees can have advantages for both the employer as well as employees. These are my observation and my experience as I traversed through these three different employment types within my professional life. Again, I feel lucky to have the opportunity to experience all of the pros and cons of all three and to learn something about myself and about the job in every client that I work for.

  • The key is to ensure that your staffing agency partner is clearly relaying timeframes and expectations to the candidates they are interviewing for your contract-to-hire positions.
  • Unlike full-time employees, who may end up doing work outside their job description, as a contractor you will have a clear role and set of responsibilities.
  • The pay structure of an independent contractor is far different from a full-time employee.
  • However, they’re not entitled to health insurance, paid time off, or retirement plans.
  • If there is a specific project that would complement the growth of a company, a fixed-term employee can join the team and work until that project’s completion.

For example, if a client asks you to work on an especially large assignment or you have a unique one-time project, flexible staffing can help you fulfill those needs immediately. You will have access to the additional brainpower and hands you need to get the job done and will then be able to scale back once it has been completed. This contract position vs full time method of staffing can also help your business combat seasonal ramp-up challenges, which are very common in the hospitality and retail industries. By bringing in additional employees you need specifically to handle the busiest shopping or travel seasons, they will not be sitting stagnant on your payroll once the slow season returns.

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