Misconceptions of Hiring Contractors

The misconception of hiring contractors.

Having worked the recruitment contract market for the last 7 years, one of the regular challenges I have faced is the misconception of hiring costs for contractors. Don’t get me wrong, in the tech world, contractors are paid more. The tax is less and the day rates are higher. But with that, they take their own risks. Pension contribution? They do it themselves. Paid holiday? Nope. Private healthcare? Themselves. You get the idea…

Now if you factor this in for Hiring managers, they have to pay National Insurance, paid holidays, all the permanent benefits – and this is before you factor in a permanent hire fee to an agency. Is it actually more expensive? It works out pretty evenly, and I’m happy to share the stats behind this.

What’s the point of this article?

Well, the hiring world is changing. Certainly more so than I’ve seen in the last 7 years. Remote hires are the new norm, companies are looking for flexibility from their staff and are throwing more and more money at Tech Transformations and projects. Seasoned contractors, who are used to working remotely, are often flexible and have helped other organisations deliver difficult programmes of work, to a tight schedule, may well be the answer.

Fully appreciate this model doesn’t work for every company, and over half the business at Jefferson Wolfe falls into the permanent retained model. However, it’s always worth exploring, and as mentioned before – the costs are very similar!