When hiring a new employee you may need to decide whether you need a contractor or a permanent employee. Contractors are hired for a fixed period of time, a specific project and are experienced in the field they are hired for.

Here are our top 6 tips for hiring a contractor:

1. Align staff levels to workflow.

Most companies will be aware of the peaks and troughs that come with business cycles. These can happen at various times throughout the year and in various departments. In many cases, it is more cost-effective to engage contractors when the workload peaks. This occurs often for project work that requires specific skills needed for successful completion.

This keeps workflow optimal and without the level of disruption caused by permanent staff giving notice and then leaving.

MACRO Tip: Hire a contractor who has experience with projects similar to yours as they need to hit the ground running and not use you as a training ground.

2. Higher retention levels.

Hiring a contractor to alleviate workload peaks makes for a happier group of permanent staff who do not have to bear the brunt of this extra work. Your permanent staff will be grateful that you have recognised their workload is not worth jeopardising.

MACRO Tip: Experienced contractors must be highly practical in nature – meaning that efficiency in their work is paramount.

3. Reduced training costs (and down time).
Contractors will often be continually mastering their art through ongoing training and courses that they take on themselves. This initiative will ensure they remain employable. There are two significant advantages for employers. These are: the reduction of down-time which would normally be a result of the time dedicated to training and the obvious advantage will be the reduction of training costs. This will ensure the contractor brings all the necessary know-how to be able to dive into the project immediately without the need for transition.

MACRO Tip: When hiring a contractor, don’t simply look for the same attributes as a permanent staff member. For instance, sometimes it’s worth considering hiring an over-qualified contractor because this will mean they can hit the mark without the need for extra support.

4. Reduced payroll administration costs.

Contractor remuneration packages typically do not include annual leave, sick leave and sometimes superannuation (if the contractor is independent and has his/her own ABN). This will provide obvious financial savings. There are less direct monetary costs that are saved through handling less red tape associated with pay roll.

MACRO Tip: If unsure what the hourly rate should be, a recruiter would be able to offer an indication of the going market rate for the skills you require.

5. Seamless transition from contractor to permanent.

This is a popular method for employers to accurately trial the candidate’s fit in the role and company, offering a clear picture of how the candidate has been able to produce results. Employers are able to do this by legitimately offering a contract as a trial period to candidates, with the ability to extend permanency after a specific time.

6. Attracting gun contractors

Contractors are mercenaries. Money is the main driver. However, faced with the choice of taking a higher paying contract with dead end skill development over the opposite, most contractors will drop their pay so that they stay employable. Duration of contract is also important, anything less than 3 months, expect to pay a premium for unless you have luck on your side!