Why companies prefer to hire contractors over permanent employees

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Why companies prefer to hire contractors over permanent employees

Uncategorised Author: Admin


It seems that the idea of being a contractor is now just as ‘normal’ as working as a permanent employee.

This is great news for contractors, as this means that more and more businesses are choosing to take on contractors rather than employing permanent staff, and there are many reasons why they are doing this…

Firstly, to back up the statement that more contractors are in fact being hired by UK businesses, a recent Institute of Leadership & Management (ILM) report ‘Flexible Working: Goodbye nine to five’, confirmed that flexible working in the UK is now offered by 94% of businesses.

This research, which surveyed over 1000 managers, found that 73% were supportive of flexible working, with 62% saying that they had senior managers acting as role models for working flexibility.

The majority of managers (82%) also noted the business benefits that flexible working brought to the company:

  • Two thirds (65%) said flexible working increased commitment to the organisation
  • Four-fifths (78%) stated that it helped retain staff.
  • And, as we move towards a 24/7 consumer culture where clients and customers increasingly expect long hours availability and responsiveness, 62% said flexible working meant the organisation was better able to respond to these needs.

Why are contractors so great for businesses?

There are many other reasons as to why companies do prefer to hire contractors rather than take on permanent employees:

  • Flexibility – This is one of the many benefits of being a contractor, the fact that you have such a flexible working lifestyle.  However, this also means that you can offer a flexible style of working to your client.  You are able to work on a project for as long as your client needs and for as many hours (within reason of course!).
  • Highly Skilled – A contractor will be very specialised in their chosen field, and it is always a good sign when someone has a skill that they are able to make a living of all on their own.
  • Fresh Perspective – A contractor will be able to take on a project with a fresh pair of eyes, as well as be able to bring in ideas and lessons that have come from other successful organisations they may have worked with.
  • Focussed and Motivated – Working for yourself brings a considerable amount of risk, one of these is being to find work… Once you have secured a contract, it is more than likely that you will do the best job that you possibly can in order to keep your client happy, which could result in them hiring you again, or even recommending you.  Companies know this and can therefore have confidence in their contractor.
  • Cost-Effective – In the majority of cases, contractors can often find that they earn more than when they worked as a permanent employee.  Yet, a contractor is still a cheaper option for a business in the long run.  For example, some of the costs that you would need to pay out for a permanent employee, include holiday pay, sick pay, pension contributions, maternity pay, training, employees NI, expenses and possible redundancy pay.

So you can see why businesses would much prefer to hire contractors rather than permanent employees!