One of the primary barriers in relation to using contractors boils down to cost. In general, this refers solely to contractor day rates which can look daunting at first glance.
Our Head of IT Contracts, Jill, explored the true financial cost of hiring a contractor versus the cost of hiring a permanent employee with the equivalent skills/experience in this video.
Financially speaking there is only a very small difference between the two once all the additional employment costs, fees, paid holidays, etc are considered. (£121k per annum for a contractor against the perm cost of circa £110k for their first year).
So, what are the other costs to your business of not using contractors?
In this blog we take a deep dive into the potential costs of not using contractors.
Start by asking yourself these questions.
Can you afford not to take advantage of Contractors’ expertise and technical skill sets?
It is no secret that in today’s market, technical skills are in short supply and people are beginning to show a reluctance to move due to concerns over the impending recession. If you have a live vacancy, finding the perfect fit can take time.
You will likely interview multiple people, run the risk of counter offers or people accepting other offers while you complete your interviewing process. Following this, there are notice periods to contend with before a person is able to start their new role with you.
Engaging contractors will offer:
• additional time thus removing the pressure to hire quickly.
• a wealth of knowledge gained over a long career of moving seamlessly between projects.
• varied areas of expertise, garnered from exposure to multiple technologies.
Can you afford to risk your customer relationships due to late delivery?
Contractors’ expertise and technical skills allow them to add value to your project under tight time constraints. This means that you can reduce your lost days of productivity due to needing more resource and keep projects moving to deadline and delivery date. This can also help you to avoid late delivery fees, or potentially upsetting customers who have expectations of delivery by a certain date.
Customers have so much choice in today’s competitive market, so a contractor can help keep your competitive edge, and deliver as agreed with customers. Thus, resulting in a long-term working relationship and repeat business.
Can you afford to lose existing team members in a skills-short market?
Employees also have a huge choice when it comes to choosing an employer. Maybe a few team members have moved on and you haven’t yet found their replacements. Your team is now potentially feeling the pressure to pick up the slack and take on additional work.
In today’s job market, this is simply not sustainable with employees having any number of employment options at their disposal. Not engaging contractors can result in sustained pressure on your existing team which in turn can increase attrition.
Can you afford to stay stationary?
With new companies launching in the UK every week offering cutting edge technology and innovative project work. Your team could potentially be drawn to these exciting new opportunities and choose to move on if you stay stagnant.
Contractors can be an excellent resource to look after some of your existing projects and maintenance work. This can give your core team more time to develop new skills, be challenged and excited in their roles, therefore making them less likely to leave.
Ultimately, can you afford not to use contractors?
When considering whether or not to engage contractors, it is vital to look past the day rate and see the wider effect they could have on your business. From helping to avoid attrition, to keeping your customer base happy, the value added is immense.
For more information on the contract market and to discuss your specific business requirements, please feel free to reach out directly to Jill Johnston, Head of IT Contracts on 02896 035 509 / firstname.lastname@example.org.