Contractor vs. Employee - Time to Rethink the Status Quo

Why you need to let go of your preference for full-time employees over contract employees.

Here’s a conundrum for you. By all accounts, the “non-employee” population—which includes independent contractors, freelancers, and outsourced providers—represents 36% of the total workforce these days. And the U.S. staffing industry grew 14% last year to reach $218B. And yet…

Direct hire employment is still the default

The dream of a full-time, long-term, fully engaged employee is alive and well. It’s what our clients often tell us they really want. Direct hire is also the standard by which consultants are compared. Do they “fit”? Will they understand “the way we do things here”? Are we paying them too much

But the old way of hiring doesn’t fit the new way of working. As people seek out a series of meaningful career experiences, the nature of work itself changes in tandem. 

Trend watch: how work gets done 

  • Work becomes less role-based and more project-based.
  • Iterative and agile methodologies extend beyond the IT team into operations. 
  • Organizations become flatter and more fluid as teams convene and disband.
  • Tenure becomes a potential liability, requiring upskilling or retraining.

There's a strategic advantage to a blended workforce 

In tech, an emphasis on team continuity may actually be counterproductive. Highly specialized contractors deliver impactful expertise directly at the point of contact. There’s less ramp-up, more transparency. 

Organizational politics and outdated policies don’t matter—the contractor is there to do a job and to do it exceedingly well. And then move on. Accessible expertise at every single stage of a project mitigates the risk of team transitions. Why buy the whole Swiss army knife when you can pull out the toothpick or tweezers just when you need them? 

Stop limiting your talent pool 

Prioritizing full-time hires also risks cutting out a big (and getting bigger) portion of the talent market—people who only want to work contract. Our consultants absolutely love working on a diversity of projects and tech stacks. It keeps them motivated and up to date. 

Simply stated, there’s an opportunity cost to insisting on direct hire. You won’t necessarily get access to the best and brightest in the market, or if you do, it’ll take you a lot longer. 

S.i. Systems’ recruiters know the companies in the market that value expertise, and the consultants flock to them. Project-based work doesn’t diminish your employer brand; it can enhance it by positioning you as a magnet for innovation and performance. 

Speed as a risk management strategy

Direct hiring is slow. When roles go unfilled for weeks or even months, projects bog down. Employees get burned out. In the time it takes you to source, screen, and onboard a direct hire, you could be halfway through your top project with contractors. And don’t overlook burden: benefits make up over 38% of an employee’s total compensation in the U.S. 

In this context, the next evolution of the contingent workforce becomes much more than a “just in time” talent strategy. It becomes a strategic choice that impacts how candidates evaluate opportunities; how hiring managers distribute workloads; and how tech roadmaps get built. It also requires better planning, better communication, and a willing and qualified talent pool. 

Independent contractors are best viewed as a source of innovation and expertise, not as a necessary evil or stopgap measure for full-time employees. They’re a critical component of a project-based workforce ecosystem. Changing your mindset can change your outcomes for the better. 

Ready to learn more? Take a look at what tech workers really want in project work and the top reasons they turn projects down.

Explore adding contractors to your team: Contact us today.

2023 Canadian IT Hiring Trends & Salary Guide

In a candidate-driven market, offering competitive rates is critical to getting your foot in the door with top talent. Our 2023 Canadian IT Hiring Trends & Salary Guide gives you not only the rate data but the expert insights and market trends you need to successfully staff your IT teams.

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