What are the benefits of hiring a contractor? And what does it cost?

If there’s one thing we’ve learned in the past few years, it’s the importance of flexibility, especially in the workplace.

For most businesses in today’s landscape, change is constant. Hiring contractors is a great way to access high-quality talent when and where you need it.

Temporary or contract staff can help your business counter the ebbs and flows of an unstable economy, allowing you to upscale and downscale your workforce as required.

Although the word temporary might be associated with low-skilled workers, modern businesses are increasingly hiring highly skilled and educated professionals on a contract basis.  

Partnering with a recruitment agency is the best way to find quality contract employees. The best news is that trusting in the expertise of a recruiter can actually save your bottom line through increased productivity and efficiency.

When to consider hiring a contractor

Parental and long-term leave

Let’s say it’s the busiest time of the year for your organisation, but you’re short on staff because of an employee taking parental leave. A contractor can help to fairly distribute the workload, and they also bring a fresh perspective and new, diverse background to the role. 

Additional resource for project or campaign

If you’re looking to place current employees on a special project or campaign in the short-term, consider hiring a contractor to cover their daily tasks for the time being. Not only will this ensure you’re utilising employee skills and experience with efficiency, but the transition back to normal tasks afterwards will be a smooth one. 

Helping your organisation grow

Engaging high-performing employees on a short-term basis can help to free up internal resources to focus on achieving strategic objectives. Productivity, workplace morale and seasonal uptakes in demand can all be addressed and improved upon through the temporary assistance of an expanded workforce, adding value for everyone involved!

The benefits of hiring contractors

If temporary staff were participants in an awkward ice-breaking game, they’d be described with the following four words: fast, flexible, smart and scalable. 

Avoiding risk

Contractors are a low-risk option with minimum commitment required on part of the employer. Whether you need to fill an employment gap, scope out talent for a permanent role or decide on your organisation’s strategic goals, hiring a contractor might be the solution you’re looking for. 

Testing the waters

Hiring a contractor is an excellent way to understand the work ethic, skills and experience of a candidate before you make the commitment of offering a permanent position. This can give you valuable insight to make a confident decision when it’s time to expand your permanent team.

Upskilling your workforce

You can also curate a more effective and customised workforce through this impermanence. Think about it. Temporary staff may bring skills and experience that don’t exist in your current team. This upskilling, even on a short-term basis, can cultivate competition of performance among employees, helping to raise the bar within your organisation. 

Getting the unicorn

High-calibre contract staff with high-performing traits, suitable qualifications, diverse skills and relevant experience might seem like unicorn employees. A skilled recruiter with a robust, merit-based process can make that perfect temporary hire happen. 

The cost of hiring a contractor

Let’s get down to the nitty-gritty. So you want to hire a contractor, but what will it cost?

The cost of a contractor is most often charged as a daily or hourly rate, excluding superannuation. As with any professional recruitment service, there are a few costs to consider.

In turn, the ongoing costs of insurance, work-cover and payroll tax are all important elements of the temporary hiring process. Finally, a recruitment agency charges a margin for their service, typically ranging between 20 to 25%. 

What does your recruitment agency’s margin cover?

A skilled recruiter will be driven to cultivate a relationship with your organisation and understand your workplace culture. This means that they will be able to place a high-performing person with relevant experience in your organisation.This professional recruitment process is priced based on the following factors.

Finding a good contractor

It takes significant time and effort to find and attract the best people. There are several factors involved in the robust process a good recruiter embarks on, like advertising for the role, conducting application assessments, completing candidate evaluation interviews and maintaining data and record-keeping responsibilities. 

Validating their details

Of course, the suitability of a contractor and their ability to assimilate into your workplace culture depends upon their qualifications, experience and skill set. A good recruiter will undertake reference checks, qualification checks, background checks and skill-testing metrics. Your recruiter’s margin covers the time and labour involved in these checks to make sure you’ve got the right candidate for the role. 

Administering payroll

In some occasions, a recruiter specialising in contract positions may offer to administer the payroll for the contractor. It can be an arduous and time-consuming task to keep track of worked hours and manage payments for temporary employees. Luckily for you, your recruiter can undertake these responsibilities as part of their role in the recruitment process.

Other things to be aware of

It’s worth considering that if you decide to hire your temporary employee on a permanent basis, your recruitment agency will likely charge a buy-out fee, which covers the expenses incurred by the recruitment agency for recruiting, screening and training the employee. 

Ready to hire your next contractor? Read more about why they cost what they do.