Using contractors for an efficient and productive IT department

These are taxing times in the business world as the economy in many areas continues to emerge from a deep recession. It’s not just taxing in the having-to-give-money-to-the-government sense; there are many areas of expertise for which businesses do not always have the right level of skills in-house.

The IT world is a case in point. The speed with which technology has developed recently coupled with the continuing innovation it brings to the workplace and to social life means that the IT department is, arguably, the fulcrum of a business. If it swings the right way it adds immeasurably to efficiency and productivity; on a downward swing it can affect that efficiency and productivity very seriously.

An in-house IT department can be expensive to run, especially for a small or medium-sized business; so are IT contractors the answer?

Flexible working

There are times when a business needs a particular project to be undertaken in the IT field, and employing a contractor to deal with this brings in specific expertise to address that issue. Contractors are flexible and can often work on jobs at relatively short notice – important if there is a major issue to be resolved quickly.

Core business concentration

Every business has IT needs but they also need to concentrate on what they do best, producing high quality goods and selling them or providing services at the level customers want. Using contractors enables employed staff to concentrate on those bottom line activities. An employer is able to control the type and the duration of a contract – though they should ensure that contracts are drawn up as watertight as possible – so there should be fixed costs that can be planned into budgets going forward.

Cost implications

Contractors will usually cost more than employing someone on an equivalent daily rate; however, it’s important to consider the pros and cons of this. Employing someone means paying them regularly and administering the tax, social security and, where appropriate, pension arrangements. That means the admin team has more work to do.

Bringing in a contractor may seem as if it costs more initially, but as all tax and other financial affairs are dealt with by the contractor there is potential for good savings. Many contractors now use specialist umbrella companies, such as, to look after their contractual, financial and insurance affairs, and that can be a great help to those who employ contractors as they know that everything is legal and being looked after appropriately.


There are some potential disadvantages to hiring contractors. The employer won’t have as much control over contractors as over employees and it can lead to friction if not handled well.

The government is always seeking to increase the number of employees a business has so that it can get its tax revenues up and often considers contractors to be potentially avoiding taxes.

The best way forward is to get advice from those experienced in dealing with work of this kind to head off any problems at the pass. Good IT consultants can make a major contribution to the effectiveness and efficiency of systems.

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Osho is Tech blogger. He contributes to the Blogging, Gadgets, Social Media and Tech News section on TecheHow.