Contractor or permanent employee: What is the best option for you?

Expanding your team is never a one-size-fits-all approach. 

There are so many things to consider if you want to choose the right type of employment engagement and the right person to join your team.

Whether you’re looking to hire someone for two months or two years, a careful evaluation of their skills and experience is critical.

Before you post a job ad, consider these factors

Time

How much time do you have? How soon do you need someone to start? If you need someone fast, a contractor could be perfect. With less long-term risk, hiring a contractor is generally quicker than hiring a permanent employee. You can get someone in the door relatively soon while thinking about a long term solution.

Cost

Do you have the budget to support this role now and in the future? Or do you just need someone for a specific time period with an end date in mind? If you’re not sure where your long-term budget sits but you need someone to start yesterday, a contractor may be the best option.

Short-term vs. long-term needs

Maybe you’re working on a project and need a web developer now, a graphic designer next month and a PR manager in the future. It’s important to assess your situation and your timeline thoroughly before hiring. If the skills required today are different to those you’ll need next year, it might make sense to hire a contractor.

Commitment

Remember, commitment is directly tied to risk. If you’re offering a short-term contract, you run the risk that the contractor might leave if something better or more secure comes along. If you need a strong commitment to your organisation, a permanent employee might be your best option.

Not every job is a permanent job

Do you value stability and continuity? Do you want someone to grow with your organisation? In this case, you’re definitely looking for a permanent employee.

If your organisation has a long-term need for a specific skill set and values stability, a permanent employee is the way to go. In most cases, leaders and employers want to hire people who are in it for the long run and have a vested interest in the organisation. 

A permanent employee can grow with your team, but you’ll need to make sure you provide them with learning, development and career progression opportunities.

Of course, when you hire a permanent employee, you must provide leave benefits and other entitlements including superannuation, personal leave, sick leave and parental leave.

Need access to specialist skills fast? Got a gap in your team you can’t afford to not fill? Sounds like you need a contractor.

One of the key benefits of hiring contract employees is that you can leverage the key skills or experience you need quickly. 

On the downside, notice periods can be as short as 24 hours for contractors, and they may walk out the door as quickly as they came in.

Hiring a contractor doesn’t come with the same level of commitment as hiring a permanent employee. While you’re providing flexibility, contractors can offer a dynamic and highly skilled workforce for your organisation. 

Not sure if either of the above is right for your team right now?

A fixed-term contract could be the answer.

Recruiting someone on a fixed-term contract is an ideal middle ground. With an agreed end date in sight, fixed-term agreements are slightly more stable from an employee’s perspective while still maintaining flexibility for you as the employer.

Fixed-term contracts are great for newly created roles when you’re trying to get a feel for how the role will fit into your organisation or for when you have a finite gap to fit, like parental or study leave.

To sum up

Permanent employees, fixed-term employees and short-term contractors all have their own unique roles to play in an organisation. 

Still wondering what kind of employee is right for your team right now? Contact Heart, and let’s discuss your options.