Contractor or Employee – Which is Best for your Construction Company?

Contractor or Employee – Which is Best for your Construction Company?

16th January 2019

Over the past couple of weeks we’ve been taking a look at the differences between contractors and employees in the construction industry and listed the benefits that can be brought to your business by hiring a contractor, rather than employing a worker to do a specific job or part of a job.  Today, as promised, we’ll be taking a look at the disadvantages business owners may encounter when hiring a contractor and why it’s sometimes advantageous to employ your own workers instead.

Last week we took a close look at the benefits to be had by hiring a contractor to do the job, but there are disadvantages that come with accessing the services of a contractor:

  • Less Control - a contractor may not do all of the work on site which means that you will have less control over the work being carried out.  A contractor may refuse to take on additional work that needs completing or they may request a different rate of pay for different types of work.
  • Lack of Loyalty – a contractor is likely to work for other clients, as well as for you so they really do not have the level of loyalty towards your company that you can expect from your employees.  It’s also possible that a contractor may work for one of your competitors and it may be difficult to enforce any restrictive covenants in contractor relationships.
  • Lack of Certainty – a contractor can stop working for you, probably without notice, if they so choose which could interrupt the project as a whole and cause delays.
  • Copyright Issues – if a contractor creates work for you, they own the copyright to that work unless a contractual agreement exists to dictate otherwise.

When it comes to hiring employees, there are some specific advantages to doing so: 

  • Complete Control – you have more control over your employees and can determine where they work and when they take annual leave.  You can also require employees to take on additional responsibilities and learn new skills.
  • Loyalty – employees are likely to feel loyalty towards your company, providing you with certainty and continuity.  Employees are likely to commit themselves to your business goals and visions.  You should also have some scope to restrict the outside interests of your employees during and after employment to ensure that they have no conflicts of interest or set up in competition with you.
  • Consistency – employees are more likely to deliver a consistent, “on brand” experience for your customers.
  • Availability – your employees are a constant resource during their set working hours which helps you to meet core operational requirements.
  • Teamwork and Collaboration – employees give you the opportunity to create strong, effective teams of workers who will share the joint goal of helping your business succeed.
  • In the Know – your employees will be familiar with your company and the way in which you work.  They won’t need to be continually directed and, in many cases, will be in a position to train new recruits for you.