There are many questions to consider. What are the drivers that result in a propensity for either full-time or contract resources? Do organizations have a bias in favor of one over the other? What impact does a competitive market have on these decisions? As an IT staffing company ( http://www.insourcegroup.com/
Still, our survey results indicate that the largest single factor driving hiring decisions is budgetary concerns. The irony is that companies citing budget concerns as the main driver for hiring strategy arrive at significantly different solutions. For instance, some companies said they avoid contract employees because of their high hourly rates, while others avoid too many full-time employees because of the high cost of benefits and perceive contract employees to be more cost effective. How can you sift through seemingly opposing perspectives to determine the best course?
Businesses must stick to the fundamentals by identifying their specific IT needs before hiring. Required skill sets must be determined, as well as the duration of the project and implementation time tables. Once you have identified the specific IT needs for which you are hiring, then it is time to factor in long-term benefit burdens. It may seem cost effective to hire full-time resources over contractors. But consider that contractors enable businesses to adjust quickly to rapidly changing market demands and technology developments without worrying about long-term salaries, benefits and severance issues.
In some circumstances, contract staff can ultimately be less expensive. An IT manager at a manufacturing company saved almost 20 percent in resource costs using contractors instead of adding additional full-time employees for a 9-month development effort. "My full-time programmers were good at their jobs and did their best to keep their skills current. But I had to deliver a solution built with new technologies utilizing architectural best practices," the manager said. "Contractors are exposed to more technologies and gain expertise at a much faster rate since they get more exposure to different industries and problem sets and must stay cutting edge to remain competitive in the contract labor market. The end result was that I got more code written in less time with fewer defects by using contractors that had more experience in the newer technologies. And when I compared the bill rates to the fully-loaded cost of my internal staff, the per-hour costs of each were surprisingly close. Given the productivity gains, I more than made up the difference,"
So where does a full-time employee make sense? "There are clearly roles within my organization that are best filled as full-time positions," one technology executive told us. "In those areas where the need for internal business knowledge and relationships is as acute as technical acumen, I tend to seek candidates who are looking to build a career, not just complete a project." That executive recently replaced a long-tenured software development manager with another full-time hire. "This role is critical within our company. We need technical skills, certainly, but this position requires industry-specific knowledge, intimate understanding of our company and the credibility that can only be gained by repeated successful partnerships with our business units. It will take a year just to get our new hire fully up to speed," he said. "The outlook for the position of software development manager is easily three years or more."
When it comes to IT staffing (http://www.insourcegroup.com/
• Required skill sets and years of experience needed
• How long specific skill sets will be needed
• Project timetables
• Long-term architecture maintenance needs
• Industry knowledge requirements
• Long-term benefit costs
• Severance costs
Rooting your decisions in proven IT fundamentals will help steer your strategy beyond short-sighted tactical considerations and better serve your long-term business objectives.
About The InSource Group
The InSource Group is a software-product development, technical consulting and IT staffing agency that provides a complete spectrum of flexible solutions for IT staffing needs, including contract, contract-to-