5 reasons to consider contract employees

A contractual employee saves company costs

Usually, a company hires full-time employees for a particular job that he or she specializes in. And that doesn’t come cheap. There are so many expense head that a company has to bear for an employee under payroll. During economic slowdown when cost-cutting takes the central theme of a company’s policy, they feel the pain. Probably contractual employees are the solution.

From employees’ perspective, more and more talented individuals are breaking free from the nine to six monotony. They are offering their specialized services to large firms on contract basis as an external consultant or a freelancer. There need not be such an obligation apart from the specific project. For them it’s the flexibility and ability to earn more that motivates them to remain as a contractual employee.

Following are the top reasons to consider contractors over full- time employees:

Its economical

It’s just not the salary, which a company pays to its employees on payroll. Health insurance, taxes, other benefits etc. adds on to the bill. Apart from this, the company pays for the office space, laptops, and equipment. There’s a significant cost involved in employee training and development too. A freelancer would come at a much cheaper rate and would do a better job than an employee. Company saves a huge cost in employing a contractor. He gets hired just for a specific project and moves on to handle other clients.

Free from litigations

Employee – Employer relationship starts with an agreement. There are several laws, and bylaws in fine prints, which when not followed could be dragged into lengthy judicial proceedings. Several rights under state act and protect full-time employees. They can sue a company for wrongful termination or over any other violation of rights, which would damage the reputation of the company. Employing a freelance contractor comes with almost zero risk.

Avail expertise service

Independent consultants come with ready expertise, and hence time to induct them into the system doesn’t consume much time. They are highly productive and carries years of experience with them. That ways time and cost for training an employee gets saved. Contractors also work precisely within the scope of work with stipulated timeline.


Contractual employees or freelancers give huge amount of flexibility to startups or small firms. Hiring process can be slowed down and attrition shouldn’t bother. Companies with fluctuating workloads can get the most out of contractual consultants. There’s no obligation after the agreed job is completed. Hence startups prefer independent consultants due to high degree of flexibility.

Lateral thinker

An independent consultant is a highly motivated professional who comes with enormous problem solving skills. Unlike a payroll employee who thinks unidirectional, a contractor sees beyond the obvious. For him, it’s about working smart in a realistic manner. He also brings experiences from other domains into the plate, which helps the company as a whole to gain insights.

Availing services of an independent consultant over a regular employee will obviously depend on the size of the company, the stage, economic environment and many such factors. Many companies prefer a mix of consultant and payroll employees to have a dynamic workforce.

What has been your experience with contractual employees? Do share your views.



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