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Making An Economical Choice Between Hiring And Contracting

One of the benchmarks many people look at for a measure of the growth of their business is the number of employees they hire. After all, that’s the central engine of an economy; nothing else happens until people have some money to spend.

With so much emphasis on adding personnel to the payroll, it can be easy to take a distorted view of the decision on whether or not to hire. It seems that if there’s work to be done, somebody should be hired to do it.

However, hiring personnel is an expensive decision that shouldn’t be made lightly. It must be able to pay for itself with increased production, efficiency, or other measurable benefits. Growing health care costs underscore the need to assess the hiring decision very carefully.

What’s the alternative? Contractors can fill work gaps for your business without requiring you to take on additional employees. If you’ve been fortunate enough to see growth in your business and you’ve reached the point where there’s enough work to require additional personnel, here are some things to consider as you choose between hiring and contracting.

Can You Justify A Full-Time Person?

The immediate response some people have to this is, “No, so I’m just hiring part-time.” While that can be a good solution, not every person who wants to work part-time is someone you want on staff at all.

This is an option often considered for handling the books. If payroll and accounts don’t require enough hours for a full-time person, bookkeeping services for small business may be best done by a contractor. These firms can provide people who do work full-time but only work for you part-time. You get quality staffing at a much lower cost.

Yes, a part-timer will save you on benefits and wages. But someone who is good enough to stay up to speed with your work on a part-time basis will probably already have a full-time position elsewhere. If they don’t, they’re probably going to use you as a springboard into a full-time role. What results is at best, constant turnover, and at worse, incompetence.

Will Someone Want Your Job?

Even if you have sufficient workload to make a 40-hour worker worthwhile, your job may not prove appealing to many applicants. The best employees want a challenge, and if your business is simple enough–at least in terms of this particular role–many applicants will pass, in hopes of landing a more rigorous job. Or they may do as a part-timer does and move on when a better option arrives, reviving the turnover issue.

The best thing about a contractor is that you have more flexibility, and so do the workers. If your IT work isn’t particularly challenging, the contractor can send a different person each time to share the more complex work. They can also use you as a starting point for new workers, promising better opportunities if they do well on your work. And if they don’t send someone ambitious, you can request a different worker–or opt out of the contract altogether.

Can You Provide What They Need?

At first thought, you may believe your new worker will have everything already in place. You’ve freed up a space for a desk, ordered a computer, and things are ready to go.

But not every job requires just a workspace. Think about your cleaning staff. Do you have a mop sink? Can you keep track of the supplies they’ll require? And what about equipment for heavy cleaning, like buffing and waxing floors?

These items are like any expensive item. If you don’t use them often enough, it’s not justifiable to buy them. Can you justify an expensive piece of equipment for a semi-annual task?

The same is true of grounds upkeep like mowing, snow removal, and even simple repairs. Do you want a 20-foot extension ladder in the way all year for a loose shingle every six months?

It’s in these cases when contractors are best. They’ll own and maintain the necessary equipment to complete the work you require, and you’ll only need to set up a schedule. It’s far preferable to hiring.

The hallmark of a successful business is the manager’s ability to think critically about decisions and make choices based on the bottom line. Getting hung up on the perceived prestige of adding jobs is a good way to distract yourself from the economic realities of running a business. Contracted services can be just the solution for a growing company.

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