Do I need a temporary-worker or a contractor?

Do I need a temporary-worker or a contractor?

I'm a director of a specialist recruitment consultancy supplying specialist non-clinical and technology skills to public and private sector organisations across the UK and Europe. In recent years the amount of people contracting and in temporary work has increased and unfortunately, as the market grows the line between a ‘temporary-worker’ and a ‘contractor’ has become blurred.

When an organisation has a need, engaging via the right method is critical in achieving the desired outcome.

Whilst there are exceptions, and the definition is somewhat in the eye of the beholder, I’d broadly define each type as follows:

Temporary-Worker

• Typically engaged via PAYE as an employee of an employment agency

• Often used to cover long term sick, maternity

• Very fast turnaround, from defining the job spec to start

• Shorter initial durations, often in days or weeks as opposed to months

• Legislation protects the employee's rights (i.e. AWR, after 12 weeks the individual has the legal right to the same benefits and remuneration as a permanent employee)

• Holiday pay and pension are accrued, taxed as an employee

• ‘Career’ temporary workers are less common, with a greater number of candidates turning to temporary work when looking for a permanent position

Contractor

• Typically engaged via Limited company

• Often used for a specialist skill e.g. project management or software development

• Fast turnaround, although some specialist contractors are booked weeks or months in advance

• High proportion of career contractors

• Generally highly experienced, often having had a successful career in permanent employment

• Not eligible for and generally do not want employment benefits (holiday pay, pension, sick pay etc)

• Tax breaks depending on company setup and circumstance (and current legislation – see IR35 public sector changes)

• Engaged via time and materials or deliverables contracts

• Multiple routes to market, e.g. direct relationships, via specialist recruitment consultancies, own networking/marketing

When engaging with customers, especially in the public sector, we are called upon more and more to advise on the differences of each method of engagement and the respective pros and cons.

To answer the question – which one? Clearly, that depends on the situation and requirement!