For some time we at JCA have promoted the idea for certain projects, that clientelle use JCA’s contract/consulting services in lieu of employing full-time staff to perform a function/role which might not be permanent position.

There are beneifts of both options, and each circumstance needs to be weighed on it’s individual merits.

For smaller organisatons the risk of needing to maintain employment of new staff beyond completion of a role/project can be a major factor. Not having the ability to necessarily re-assign the employee to a new project may be costly.

Of course the employer always has the ability to terminate the employment giving between 1 to 4 weeks notice (depending upon the duration of employment to date), thereby minimising it’s exposure to lengthy non-productive periods. However employers should be careful not to gain a reputation as offering permament work, only to terminate staff when it suits them (making it difficult ultimately to re-hire those personnel when needed). Dismissal costs can also be very expensive.

There is also much argument about the cost of contract v’s direct employment… we consider this argumnet to be not totally substantiated. For instance most employers will have the exact same overheads/statuatry charges/employments costs that the contract provider does. Infact many contract providers overheads are much smaller than those of larger clients.

Using a contract/consulting service also avoids the need to pay an upfront placement fee. Instead that equivalent extra cost is essentially built in to the hourly rates and paid over the life of the contract period, instead of upfront.

Another argument for outsourcing over employing is that in times of low unemployment (as is eveident in Australia currently) it may not be possible to find personnel to employ direct. Outsourcing of personnel can either alleviate these problems on a temporary basis or fill that void for the life of the project.