Hiring developer on contract vs a full-time employee - comparison

Many startups and small companies that we work with are often confused about whether to hire a full-time employee or hire a person on contract, directly or via a company. Let’s look at some points regarding both. 

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Developer on contract

• Work flexible hours in most positions
• Are usually experts in what they do/ don’t require much training to begin the work
• Work usually for a specified length of time (3 months/ 6 months/ 1 year)
• Work seasonally or only when a company has a need
• Paid one-time payment for services or hourly pay
• Work under adaptable procedures
• Do not typically earn company benefits
• May purchase their own equipment or tools to complete work
• Are usually paid when work is completed and approved by the client
• Work remotely or in their office facility in some positions
  

Full-time employees

• Usually work within set hours
• Work on an employee agreement year-round
• Receive payments (salary) on a regular schedule
• Requires training and often a lot of learning to get the work on track 
• Receive internal training
• Complete specific work procedures
• Have taxes withheld and managed by the company
• Earn company benefits
• Use equipment and tools provided by the company

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When to hire developers on contract from a company?

- You don't want to handle HR, Payroll, employee benefits, paperwork etc.

- You don't have the necessary knowledge/ time to train the employees on particular skills.

- You don't have expertise hiring developers, and doubt whether bad hire happens.

- You need multiple tech expertise and want to benefit from a team's knowledge.

- You don't want to worry about people resigning and employee engagement.

- You want someone or a team to work as your own team for a period of time.

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Many consider only developer salary while comparing the expenses. But hiring a developer on contract from a specialized company is way cheaper considering the hidden cost that can occur due to the above points (hiring, training, maintaining people).

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Both hiring full-time employees and developer on contract has its own perks and shortcomings. If the work is on seasonal projects/ you don't have requirements all the time, get a prototype or product developed quickly, need a person specialized in a technology or domain - hiring a developer on contract through your network or from other companies works well. If it is for long-term ongoing maintenance work that doesn't have tight deadlines or it requires full-time supervision or daily updates on the work, hiring full-time employees seems to be better.

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