Why hire an IT contractor?
In this current economic climate, it seems clients are reluctant to increase their company headcount due to having a large fixed cost on their books. Consequently, this is where contractors who can perform the same work come in handy. When large companies announce redundancies, you will often see the same companies offering contract positions to ensure continuity of service to their customers. This has meant in recent times that there has been a large shift towards contracting as companies require the skill set without having a permanent member of staff on the payroll.
What is IT contracting?
IT contractors are professionals offering specific IT skill sets to clients on a business-to-business basis, just as you would engage with any external business for their services.
After an initial discovery meeting, the assignment is scoped, timescales and cost estimates are agreed, and contracts are signed. Then it’s up to the IT professional to work with you and other key stakeholders to deliver on time.
But what exactly are the benefits of hiring these contractors for your business?
1) Outside IR35 with contractors
IR35 is a piece of tax legislation which looks to determine a genuine business from what we call a disguised employee.
To be ‘inside IR35‘ means that as a company, for tax purposes, you are mandated to pay tax for an employer. To be ‘outside IR35’ means that you are operating as a genuine business, and therefore operating outside of the IR35 rules, so are not subject to tax payments.
When you onboard contractors rather than employees – you only pay for the services you receive rather than the employee. Consequently, hiring contractors means you do not have to pay for IR35.
Perhaps the most widely acknowledged benefit is that they are flexible.
Flexibility in the industry is probably one of the most essential assets in this current economic climate. COVID-19 has seen companies on a global scale make employee cuts, either placing them on the furlough scheme or thereafter making them permanently redundant.
Indeed, hiring IT contractors allows you to respond to market needs and demands, as they happen. They are often used to working in different locations, for different personalities, for varied periods of time. Hiring a contractor also gives you the option of evaluating whether you have a long-term job requirement in a function.
From an employer’s perspective, IT contractors also enable companies to maintain a positive image of oneself. For example, if an employee decides to leave unexpectedly, it may take time to fill the current job role, meaning the rest of the time will have to complete the additional work. Consequently, If you need to replace a job role immediately, hiring a contractor alleviates the additional workload from the IT team, creating a more positive and stress-free working environment.
3) Shorting Hiring Process
The process for hiring contract employees is traditionally a lot quicker – and it certainly should be! This is both because you should be hiring for technical skills to deliver something specific rather than long-term cultural fit.
Contract and temps usually have a very specific skill set and are accustomed to performing on very niche projects. Having a highly specialized individual on your team can really help to drive your business forward, without having to go down a laborious and time consuming hiring process.
As aforementioned, negative and demotivated mindsets may cultivate a hostile perception of management from employees, thus supplying IT contractors who are highly skilled and professional to assist with projects will help to safeguard companies from this happening.