Isn’t it obvious that having an employee in many cases is cheaper for a company? So why even hire these expensive IT contractors?
1. Skill set. In the hot market it’s hard to hire a person with specific skills, especially if your company does not offer competitive salaries. So what do you have to do to meet deadlines of this new project? You hire a contractor knowing that even though you’ll pay more (comparing to an employee) for the same set of skills, it’s a temp solution that will let you complete the project.
2. Short time needs. Would you marry a carpenter if you need to replace your kitchen cabinets? Why not? But when your toilet starts leaking, divorce the carpenter and marry a plumber… You may not need a person with specific skills for a long time, so why bringing him/her on board as an employee? With consultans, you do not need to go through this ugly divorce procedure. A separation can be done in a heartbeat.
3. Benefits. I hope there are companies that share their savings with employees who do not use their benefits. For example, a family is using the wife’s medical insurance, and the husband does not use this benefit in his firm. IMO, his company should increase his pay for, say half of the amount it saves on group medical insurance.
4. Managers want to sleep well at night. There are consultants and … consultants. Some of them are hired for a routine coding, while another ones just for being season developers. Smart development managers are keeping seasoned and overqualified consultants just in case. If something goes wrong, these consultants will either offer a proper solution, or fix the problem quickly. These managers realize, that they could have gotten a person for the same job for a lot less money, but they bite the bullet just to sleep well at might.
5. A second opinion. Say a new developer managers comes into an IT shop with establised and known superstar-developers, authorities and other bullies. This manager wants to find out if the code of the current application is written efficiently, using progressive technologies and patterns. How to do this quietly without becoming an enemy of the entire team? Hire a consultant and ask him/her to do a code review and offer some improvements, if needed. In the “worst case scenario “, this consultant won’t find anything wrong, but a negative result is also a result…The manager will have peace of mind. If this code review will find some pain points in the code, it’ll help the manager to address them without being a bad cop.
6. Offshore consultants. Is this a good idea to hire offshore consultants? Yes, but if you are hiring this person because of his/her skills, and not just because it’s cheaper. In the second case you’ll wind up paying more by the end of the project. While in general, I am not too happy with the way the outsourcing is done, currently I work with a very good developer who is located in India. I’ve interviewed him for the job, I liked him, and he does a very good job. If he decides to quit, I may hire another offshore person, but only if this guy has the proper skills. His/her rate will still be a little cheaper than in USA, but I’m not looking to hire nine women to give a birth to my child in one month. It’s only the 21th century, and our medicine did not figure out how to do this yet.
I’m sure, you can find more reasons for hiring consultants or just contractors. Feel free to add some to my list.
Disclaimer: I am a contractor