Contract Workers: The Pros and the Cons (and, is it right for your business?)

Outsourcing employment has become more common in recent years. Many companies are now considering whether hiring contract (aka contingency) employees makes sense for their business. There are several advantages and disadvantages of hiring contract workers.

The Pros

Increased Job Security for Full-Time Workers – When contract staff work only occasionally, a company’s core employees will enjoy greater job security. If several employees happen to be on leave at the same time the company may hire contract workers. This will enable full-time employees to take time off without worrying about losing their jobs. Another example includes hiring temporary workers during the busy season. This will eliminate more full-time workers who may fear layoffs during slower times.

Increased Efficiency – Hiring temporary workers allows a business to find employees with specific expertise. It also enables a company to increase the workforce during busier times. According to Unemployment Tracker, this is especially true when a company has specific busy seasons. When hiring permanent employees there are recruitment costs, background checks, and endless amounts of paperwork required. The temp agency will be responsible for this when using contract workers.

Cost Effective – This is one of the biggest advantages of hiring temporary workers. Temporary workers almost never receive benefits. This would include insurance, sick days, and vacation pay. This is especially true for health insurance, which is a major expenditure for most companies.

The Cons

Increased Training Costs – A business will need to train employees each time they bring in contingency workers. Even individuals that are already skilled in their particular field will need training regarding company policies and procedures. Some companies hire temporary workers several times each year. This continual training of different employees takes a lot of time and resources.

Decreased Loyalty – Full-time workers often feel a sense of pride and a deep connection to the business they work for. Temporary workers are normally not as loyal to a company as permanent employees. Even good temporary workers will not have the connection to the company that a long-term employee will.

Confidentiality Issues – Contingency employees may gain access to certain information that could damage a company if made public. Temporary workers may need to know things such as passwords and other internal company information to do the job effectively. There is always a concern that they may misuse this information after they leave.

Whether a company primarily uses full-time or contingency employees will depend on a variety of factors. Each individual company will need to decide which is the most productive and cost-efficient way to do business.