Permanent Employees Vs Contractors
If you are looking to start one or several new projects and you are looking at recruiting a Project Manager, perhaps you are juggling the pro’s and con’s of taking on a permanent employee or pulling in a contractor. What is the best course of action?
There are clear differences:
Employees
- Usually expect to take longer recruiting an employee. Aside from the fact that your selection process should be more rigorous, people looking for a permanent position may already have a job and require at least 1 months notice.
- Employees are looking for a career path and longevity, not just a brief for their first 6 month project.
- By investing in an employee you are developing the skills and capabilities of the organisation. This is a better solution for the longer term as your expertise won’t walk out of the door once the project is complete.
- An employee would expect to have a greater commitment to the organisation and it’s success. They will also often enjoy more buy-in and receive greater co-operation from colleagues as they “carry more weight” than an outsider.
Contractors
- Can be recruited quicker and don’t need the 1 week company introduction course. A seasoned contractor will expect to be up and productive on day one.
- You select a contractor based on who has done the most similar job before. You are buying in immediate expertise that may not be required by the organisation in the long term.
- A contractor will be more expensive than an employee.
- A contractor will be less inclined to engage in office politics and other “noise” or “baggage” that might distract an employee.
- The contracting market in the UK is very mature and there is a very large pool of contracting talent available.
If you are considering using a contractor, some advice:
- Make sure you have built knowledge transfer as a deliverable. Don’t let all that knowledge walk out of the door at the end of the project.
- Whatever the contractor may say do remember that this is a financial transaction and they have a strong interest in ensuring their contract is extended.
- Negotiate based on a professional day rate. Avoid paying by the hour if at all possible, particularly for more senior positions. There is a small minority of contractors who will negotiate on an hourly rate so they can then burn excessive hours (+10 / day) to increase their income. If you do go for an hourly rate agree working hours and the approval process for working extended hours.
- Always negotiate. Don’t accept the first rate you are offered. If you have a good project that provides a long term opportunity then your negotiating position is strengthened.
Some extra advice if you are using a recruitment agency:
- Tell the agency that you want to know the rate the contractor is receiving and therefore the commission of the agency. Ideally agree a percentage upfront. Agencies are in it to make money and if you have said you will pay £350 / day, guess what, the contractors will all cost around that or more. The contractor themselves may not be receive anything like that.
- Ask the agency about the references they have taken on contract candidates. Some agencies will submit candidates to clients will little investigation into their true capabilities.
- Before hiring an agency talk to them to make sure they have the industry skills and experience to understand your true requirements. Agencies often use staff who are more sales orientated than anything else. How can they be qualified to select good candidates to run your project?
- If you are using an agency do give feedback. If a candidate is no good, then say why. You can’t expect the agency to read your mind and their candidates will want feedback, particularly if they came to interview & then got rejected.
Speak to a recognised industry leader such as Wellingtone Project Management and ask them about their commission rates for Project Management Recruitment and how they go about selecting, filtering and recommending candidates.
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