Contractors vs. Direct Hires

I am looking for specific examples or case studies of why it is more cost effective to hire a contractor/consultant rather than a direct hire. I am launching my own freelance company so I would love to have some facts and figures to back me up on why it is beneficial for companies to go with the contractor/consultant. I have a lot of good reasons such as:

• Instantly save 20% or more by not paying benefits.

• Greater efficiencies due to specialized expertise.

• More flexibility in staffing projects.

• Reduces exposure to lawsuits.

• Save on additional overhead costs.

Does anyone have an specific examples from clients/customers?

Thanks, Angie


2 Replies
David Tait

Hi Angela,

I don't have any case studies but some of the benefits I feel that my company offers to clients vs direct hires are very similar to the ones you've already mentioned. The main ones are:

  • No need to pay benefits, holiday pay, sick pay or National Insurance (UK employers Tax)
  • During quiet times they don't have staff sitting idle
  • We can often offer a faster turnaround than a small internal team who may not have all of the relevant skills (similar to your second point)
  • No need to worry about the cost of keeping hardware and software up-to-date.