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Hiring Contractors Vs. Employees:
the Real Cost Difference
By Christian Knott
Hiring a contractor
may be more
than you think
Christian Knott, owner of Last Daze,
LLC, is an independent software
consultant providing all-inclusive
software services to high-tech
companies from coast to coast. You can
reach Christian by e-mail at
email@example.com or visit the Last
Daze web site at www.lastdaze.net.
The misconception that contractors are more expensive than regular employees is
common. Technical managers are not always aware of the true cost of hiring new
employees. However when considering the extra, sometimes hidden, resources
expended in making a permanent hire outsourcing often makes sense. In these
turbulent times even the most stable companies are tightening their belts.
Outsourcing provides them with a low-risk, commitment-free means of
accomplishing technical goals without the hassle or overhead typically associated
with a new hire.
Hiring Managers often overlook many of the costs of recruiting regular employees.
Expenses run deeper than just advertising costs. Advertising in newspapers,
magazines, internet, billboards, and radio does cost money but in addition,
considerable time is spent writing and placing these ads. Because time is money, as
the saying goes, this gets expensive. Sourcing takes time too and includes
searching at job fairs, screening resumes, appraising employment agencies of the
jobs requirements, posting jobs internally, networking, etc.
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Once resumes are sourced and narrowed down to the most
qualified, Interviewing must take place. Potential employees
interview with an average of three company representatives
prior to accepting a job offer. As it can be difficult to
terminate an employee once h