Ask the HR Department: How do you determine when to hire someone on contract or hire them as permanent?

By Andrew Caldwell, HR advisory team lead at Peninsula Canada. A Certified Human Resources Professional (CHRP), he specializes in employment relations, employment standards, recruitment, and employee engagement. 

When it comes to deciding whether to hire a worker full-time or on a contract, there are pros and cons to both work arrangements. A contract worker will generally be more expensive to employ and have more diverse experience from having worked for many employers within a shorter time frame. For this reason, they may be more innovative and be able to give insight into the industry and what your competitors are doing. By hiring contract workers only when they are needed, businesses can also save on the expenses and administrative work of maintaining full-time staff and providing benefits.

On the other hand, contract workers do not have the same loyalty to their employers as full-time workers. If your competitors offer better pay, you may find yourself looking for new talent regularly. If you are consistently hiring contract workers for the same jobs, it is worth considering employing full-time staff.

While full-time workers require a greater investment in training and time, they will get to know the way your business operates and are likely to work more efficiently in the long run. Your business will enjoy greater stability and develop a workplace culture. Having in-house staff also makes it easier to manage workloads and ensure confidential information is kept secure.

Peninsula is an HR and health and safety consulting firm serving over 80,000 small businesses worldwide, including dealers in home improvement. Clients are supported with 24/7 employment advice, updates to legislation changes, HR software, and legal insurance.