Contractors and the Benefits they Bring to Construction Company Owners

Contractors and the Benefits they Bring to Construction Company Owners

07th January 2019

In one of our articles last week we took a detailed look at the differences between contractors and employees in the construction industry.  Getting employment status correct is essential as this has an impact on the legally binding rights and obligations for employers, including how tax and insurance is managed and which employment law rights apply.  Should an employee be classed as a contractor incorrectly, they could make a compensation claim against your business, perhaps demanding a right to redundancy pay.  As promised, today we’re going to continue this series of articles on contractors and employees which will provide a comprehensive view of the advantages and disadvantages of hiring contractors and employing workers so that you, as an employer, can ascertain which model best suits your business.

First, let’s take a look at the benefits to construction company owners of using contractors, rather than hiring employees:

  • A contractor will bring to the table a specific specialised skill set and talent that may not be available to your company.  This will enable you to take on projects that involved tasks that cannot be carried out by your current, day to day workforce.
  • Using a contractor makes HR and administration easier as you don’t need to organise their PAYE or contribute to National Insurance for contractors as they are responsible for dealing with these issues themselves.  Your company will also benefit as you don’t have to pay sick pay or holiday pay to contractors, and you’ll avoid the added admin tasks that this involves.
  • If you have some urgent work that needs doing quickly by somebody with specific skills that nobody in your current workforce has, then hiring a contractor is a great way to get the job done.  They will not need to undertake any training or induction and will be able to commence work immediately.
  • If a contractor you’re working with does not have the skills to meet your requirement, there is more flexibility around issuing notice and terminating the relationship.  It is far easier to replace a contractor with somebody more suitable than it is to replace an employee.
  • If you’re unsure about the most appropriate hire for current project requirements, or whether you have enough ongoing work to hire somebody on a permanent basis, then taking on a contractor is an effective method of testing and defining the role.  This will enable you to shape the role you recruit for or you may decide to offer the contractor a permanent position by re-issuing employment contracts.
  • Using a highly skilled, specialist contractor on a project will give your construction company a competitive edge that could boost your business in future.  A contractor will also bring a more objective perspective to projects and may even help your company to improve its processes in the future.
  • Hiring a contractor means that your company will not be obliged to supply work (and payment) if demand in workload lessens or if their circumstances change. 

Next week we’ll be looking at some of the disadvantages to business owners of using a contractor, and the benefits that can be brought to your business by hiring employees instead.  Don’t miss out on this useful information for construction company owners – follow us on Facebook or Twitter for a notification of when the article is published.