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  • Bob Mitchell

CONTRACT OR DIRECT HIRE-WHICH ONE IS RIGHT FOR YOU

Updated: Oct 24, 2023



There are many different reasons to decide on whether you want to be a contractor or direct hire.



Here are a few PROS and CONS for being a contractor


PRO-you will be able to increase your hourly rate as a client will not be responsible for little or no administrative costs for you


PRO- you will usually know when your assignment is going to end and you will have the added benefit or looking for your next contract while still working on your current one


PRO-you get paid for all of the hours you bill, compared to being salaried and getting paid a weekly rate no matter how many hours you may put in.


One of the biggest PROS with being a contractor you are in control of your own schedule and work load.


CON-as a contractor you are responsible for paying your own taxes and other fees that go along with that.


CON-you will not be entitled to any benefits that the company you are contracting with has to offer. For example PTO, paid holidays, insurance, to name a few.


CON-if you need health/dental/vision benefits and you are not on someone else’s plan, you will be responsible for paying for your coverage. As well as a lot of companies will want you have carry liability insurance, or be bonded.


One of the biggest CONS is contractors are usually the first ones to go if there is a RIF.




Here are a few PROS and CONS for being a salaried employee



PRO-you will enjoy the benefits that the company has to offer. For example PTO, paid holidays, insurance, to name a few.


PRO- your obligated deductions will be taken out of your paycheck for you. So you don’t have to worry about it. Its a lot easier to file your income taxes as well.


PRO-you are entitled to certain protections that contractors are not, access to human resources, employment laws, the ability to qualify for unemployment benefits if you are released, etc.


One of the biggest PROS is employees have more security for the most part you know where your next paycheck is coming from



CON- You fall into a chain of command where schedule and work load is dictated to you.


CON- lower pay scale to outset the benefits.


CON- your promotions and raises are controlled by management


One of the biggest CONS is employees are more controlled you are hired to do a job and are judged by the result of the work and sometimes have to live with things that are out of your control if you want to continue to be employed



The decision to be a contractor or direct hire is something that you need to consider carefully before making your choice, As a contractor having a resume with a lot of short term jobs can sometimes keep hiring managers from looking further into your skills. Longevity is something that hiring managers are looking more at these days as they want people who want to grow with the company.


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