At day’s end, the single most important metric that most businesses care about is profitability. This article will take a brief look at the costs and benefits associated with hiring a contractor versus bringing on a full-time employee to help determine which option might work best for your business.



–          Hire a talented worker without necessarily having to provide a benefit package – and cover its associated costs along with other employment-related taxes – that are provided to full-time employees.

–          “Elasticity.”  If a project goes away, then contractors can either be cut or dedicated to other projects. Likewise, if a project is immediately revived, lengthy onboarding, screening and interviewing processes are expedited and a simple phone call can secure a short-term placement. Bringing on contractors gives employers the ability to stretch and shrink their work-force as business need dictates.

–          Many, if not most, contractors like the idea of variety in jobs and are comfortable with the notion of working in an “at-will” environment where employers can make hiring/termination decisions without advance notice or rationale.


–          Typically charge a higher per-hour fee than full-time employees.

–          Project hours may vary; therefore, the total cost of contracting services is not transparent from the beginning.

–          Long-term contractors can gain institutional knowledge of a company’s business, which could put the employer at risk if the contractor decides to leave for another opportunity.

Full-time hiring


–          You know with much more specificity what your total investment cost is when it comes to hiring a new full-time employee.

–          Hiring a full-time employee is akin to making a long-term investment. You can nurture and train them such that they feel they have a vested interest in the success of your company.

–          They get to know your company much more intimately than would a contractor, thus creating an opportunity for them to dive even deeper into specialized services you offer.


–          Certain mandatory benefits must be granted to full-time employees that may include pension, medical, healthcare, paid vacation and sick time.

–          State, federal and/or other employment related taxes that are the company’s responsibility with full time employees.

–          You take the risk of committing to a longer-term relationship without knowing the exact results and fit your new employee will deliver.

A third option to consider is something called contract-for-hire, or a combination of contracting and full-time employment. This is an “earn your keep” approach to hiring that can incent a contractor to give their very best efforts if the payoff is a full-time job down the road. If a company sees value in a contractor after a fixed amount of time, they may then opt to train and convert that person into a full- time employee. One of Affirma’s specialized services is Staffing, which pairs talented job seekers with hiring managers, either full-time, contract-based or a combination of both.

Figuring out which hiring method is best for you will require some number crunching and also depends on factors like benefit packages, duration of project work, the culture of your organization, strategic vision, and the candidate’s level of expertise, among others. Below is an infographic from that illustrates the costs of bringing on new employees.

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