Hiring Consultants vs. Full Time Permanent Employees

August 23, 2023

The benefits of hiring contractors/consultants versus regular full-time employees are numerous and varied. There are many reasons why hiring a consultant/contractor can be the right decision for a company and why hiring a full-time employee can be more advantageous, depending on the situation. Let’s dive into some examples and key differences below.



A W2 employee is a full-time employee that a staffing firm identifies and vets through an interview process to ultimately be placed at a client site as a permanent employee. Once this individual begins their first day of employment, they are considered a full-time employee of the company and will be granted benefits such as retirement, health insurance, PTO, stock options, and bonus, depending on the total compensation package. This individual is on the company payroll.

A contractor/consultant is considered an employee of the staffing firm that is placed on assignment at a client site and is on the staffing firm’s payroll. The staffing firm provides all benefits to the consultants.  Terms and conditions are already established in the Statement of Work before the recruiting process begins. All liability and insurance responsibility falls on the staffing firm supplying the assigned contractor. This is designed to be a remedy to meet project deadlines with designated experts in the field to support a company’s growth, goals, and deadlines.


Employer Perspective for Hiring Consultants/Contractors

  • Short-term Need
    • Hire a contractor for a short-term immediate need while a project is underway with a tight deadline. Sometimes the budget might not be fully approved to hire a full-time employee, but there may be funds available for a project so employers can hire employees through this avenue instead.
  • Test Run
    • The client can hire an individual through the staffing firm and essentially “try before they buy”. This allows for the company to determine if this consultant is going to integrate nicely with their company culture and team if they wish to decide to hire them full time after the project is completed.
  • Flexibility
    • Companies can choose to hire individuals through an assignment to help them accomplish company established goals and can extend the contract if needed. Most contracts are 6-months to 12-months or even 24-months long, with flexibility to extend the assignment, convert this contractor to a full-time employee or terminate the contract after the job duties have been fulfilled.
  • Quick Delivery
    • If a company is in a bind and needs talent, the placement process is much faster for a contractor versus a direct hire employee.
  • Access
    • Have wide access to a stellar candidate pool through a network of qualified individuals that have likely been repeatedly placed on assignment at multiple client sites through the staffing firm’s client relationships.


Employer Perspective for Hiring Permanent Employees

  • Long Term Investment
    • Have multiple projects that this individual will need to complete and will be an integral part of the strategy, department, and company from a permanent standpoint.
  • Commitment
    • The incumbent will be committed to excellence and delivery because the company has shown they are committed to them to hire them as a full-time employee and invest in their benefits.
  • Advancement
    • It is mutually beneficial for both the employer and the employee to enter an employment agreement since this offers stability in terms of career trajectory/training and the advancement of both the employer and employee.
  • Modification
    • Should the company’s goals change, new strategies and projects will be implemented to adhere to the new guidelines. This can be determined at the company level and not need to be negotiated with the staffing firm if the talent was operating as a consultant.
  • Timeline
    • While the hiring process is historically a bit more time consuming for a permanent employee, it pays dividends in the end to be thorough in the interview process since this will be a long-term investment from the company perspective when offering full time employment to permanent employees.



*Contractor/consultant are interchangeable in this article.
*W2/ permanent/full-time employee are synonymous in the context above.