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3 Reasons To Use Contract Labor

3 Reasons To Use Contract Labor

By | 08.28.10
3 Reasons To Use Contract Labor

In the course of any business, times will exist when you need more help than you have the budget to hire. You have the option to ignore the need and place additional responsibilities on your existing employees, but the cost of overtime and worker burnout can soon outweigh your financial savings. Before you add a new employee to the payroll, consider three reasons to use contract labor at your company.

Use Contract Labor for Savings

Perhaps the primary reason to use contract labor is that it is often less expensive than hiring a full-time employee. In addition to posting a variety of job ads, you may incur these expenses:

  • Background checks on top potential candidates
  • Fees for employment agency assistance
  • Overtime to employees helping with the interviews
  • Training costs.

Of course, that’s just to find a new employee and get them up to speed on how your company operates. It doesn’t include the cost of benefits, payroll taxes and workers compensation insurance. While you may still incur costs when screening contract labor prior to awarding the contract, it typically isn’t as much as bringing on new permanent staff members.

Use Contract Labor for Skills

It’s common knowledge that individuals with specialized skills come with premium salary expectations. CPAs, lawyers, efficiency consultants and web designers all possess skills your business may need but be unable to afford as part of the permanent payroll. Rather than paying a retainer or ongoing salary, the use of contract labor allows you to pay by the project.

This concept can also apply to workers with other skill sets. Imagine that your business provides safety equipment to hospitals and doctors’ offices and you’d like to expand into assisted living facilities. Your existing sales force already understands the benefits of your product, yet they lack the connections to get in front of the new potential customers. Adding an independent contractor who has the correct experience to liaise with the new buyers is a solution to what could otherwise be a lengthy sales undertaking. Once your sales staff receives beneficial introductions, you can pay the contract labor fee and part ways, assuming you don’t have additional uses for the contractor’s talents.

Use Contract Labor for Speed

It’s no secret that finding the perfect new employee for your business takes time. Not only must you find an individual with the necessary skills to do the job, you must also find a personality that won’t clash with your existing staff. Because it can be challenging to terminate permanent employees who don’t quite meet expectations, it’s imperative that you don’t jump the gun on your hiring decision.

Of course, you don’t always have adequate time to evaluate potential candidates when you’re in urgent need of filling the position. The use of contract labor allows you to continue business operations as usual without tying yourself to a particular employee. As long as you stipulate the exact nature of the business arrangement in the contact, you should be free to continue your employee search.

 

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