What makes contractors so attractive to businesses?
The contractors are paid higher compared to regular employee and their working schedule is also flexible. So one should wonder what the basic incentives are for companies who are willing to hire the services of Contractors. The employers can benefit their business by utilising the services of Contractors but it does not mean that permanent employees are a burden over the company.
The employer has always been in a need to hire permanent employees to run the day to day business of their company like support, maintenance and security of the site. However for those projects which are short in nature or there is considerable fluctuation in work load, Contractors are the best option. They finish the task with a professional approach and the employer is saved from recruiting new permanent employees for these short term projects.
Do Contractors enjoy benefits similar to permanent employees?
It is not the case that companies are reluctant to engage Contractors for long term projects. Some companies may have the view that it is not possible to fully command such contractors or they don’t understand the business in depth. The another reason, does relate to the company’s business secrets and they don’t want a contractor to get attached with them for 6 months and when the contract is finished he walks out after understanding sector related knowledge. But now the circumstances are moving in other direction and Contractors are given equal importance as compared to permanent employees, due to their knowledge and experience. With contracting business gaining progress day by day the Contractors are playing a vital role in the field of information technology.
What are the costs associated with a permanent employee?
The following costs and expenses are incurred by a company if it hires a permanent employee.
- A fixed monthly salary is paid to such an employee.
- The company must provide national insurance cover to them.
- A specific work space is required for employees and all the costs are beard by the company.
- Permanent Employees are eligible to get sick, holiday and maternity pay. Apart from this pension contributions are also the part of overall expenses linked with an IT employee.
- The administration and training expenses are additional costs, which a company has to endure.
In relation to all these expenses and costs even if the IT contractor is paid two or three times than a permanent employee, the company can still save a lot. The contractor finds it easy to work on his own with no boss. The company on the other hand needs to pay a specific amount to IT contractor and nothing else.
Problems with shuffling of permanent employees
After training sessions and gaining some experience it is most likely to be happen, that a permanent employee may quit the job for better opportunities. The Contractors are experienced and require no training and the company needs not to spend in this context. They complete the task within time and go on with next contract.
Problem of lack of dynamic experience when dealing with permies
The permanent employees have the relative experience only in line with their business and lag behind when it comes to new techniques and methods. This would definitely affect their overall performance and quality of the work. While a contractor has ample knowledge and has the ability to see things on a broader perspective.
The average salary of a programmer in UK is approximately £35,000 but an IT contractor can earn double the amount by contracting some highly paid short term contracts. It is evident from above discussion that permanent IT employee is not less expensive than IT contractor in any way. The most of the expenses a company has to bear are not shown in the salary of permanent employees.