Is Hiring an IT Contractor Worth It?

From securing customer data to launching new software, having the right IT expertise is critical to business success. But here's the big question IT and HR leaders often wrestle with: should you hire a full-time employee or bring in an IT contractor? 

Each has its merits, but making the wrong choice can lead to unnecessary headaches—or worse, blown budgets.

This article helps you weigh the pros and cons of hiring IT contractors to decide if they're worth the investment for your organization.

What is an IT Contractor?

An IT contractor is an independent IT professional who offers specialized IT services on a temporary basis. They might be experts in cybersecurity, cloud migrations, app development, network security, or any other specific tech area your business needs help with. 

IT contracts may last a few weeks—long enough to migrate to a new system, for example—or months or years, depending on your specific needs. Contractors do not receive benefits (like healthcare or 401(k)s) and set their own rates. 

This chart outlines the main differences between IT contractors and IT employees: 

Depending on the country and state your business is in, there may be legal considerations to keep in mind for contractors. Generally, you cannot tell contractors exactly how or when to complete their work. Make sure to check the legal requirements so your business doesn't get in trouble for misclassifying workers as contractors when they should be employees. 

What are the Advantages of Hiring an IT Contractor?

When deciding whether or not to hire an IT contractor, you'll first want to look at the benefits of using an IT contractor. These include: 

Flexibility

With contractors, you can quickly scale up and down your IT resources based on immediate needs. Need help fixing a security bug? A contractor can often be onboarded in a few days, rather than the lengthy process to get approval for, hire, and train new employees. Contractors give you the agility to scale quickly—without a long-term commitment. Need someone for just three months? Perfect. Contractors are your best bet.

Cost Savings

Contractors do not receive benefits like healthcare, retirement plans, or paid leave. This significantly reduces costs, especially compared to hiring a full-time employee who needs training, onboarding, and ongoing benefits. Also, when they are no longer required, you simply end the contract—there's no need to go through the layoff process. 

Access to Specialized Expertise

IT contractors often have highly specialized skills perfect for niche or technically challenging projects. Whether you're migrating to the cloud or tightening cybersecurity measures, they bring in fresh, expert insights you might not have in-house. 

Scenarios Where IT Contractors Shine

Contractors are especially useful in situations like: 

• One-time tech initiatives (e.g., cloud migrations, cybersecurity assessments).

• Filling resource gaps during hiring freezes or team restructuring.

• Covering urgent workloads or specialized skills shortages quickly.

• Covering illness or maternity/paternity leaves. 

Managing an IT team can be challenging. Get help with CBT Nuggets' IT Manager's Handbook resources. 

What are the Challenges of Hiring an IT Contractor?

Contractors can be a huge help when you're in a pinch, but they may not always be the right fit. Here are a few potential downsides to keep in mind:

Higher Hourly Rates

Short-term contractors usually charge higher hourly rates than your regular full-time team. That's because contractors are self-employed, which means they pay more taxes and cover their own benefits, like health insurance, PTO, and retirement. For longer projects, these costs can quickly add up.

Integration with Existing Teams

Contractors often have limited availability, making it challenging to integrate them with the rest of your team. They simply might not be available for that 10 a.m. call or be willing to drop everything to jump into a brainstorming session. Because contractors are self-employed, you have little control over their schedule.  Effective collaboration requires a bit of extra effort and clarity.

Loss of Knowledge 

Relying extensively on external contractors carries the risk of losing critical knowledge once the contract ends. Maintaining continuity and retaining institutional knowledge becomes trickier without permanent staff. To avoid this, be careful when weighing the pros and cons of hiring a contractor versus a full-time employee—and be intentional about documentation. 

How to Decide: IT Contractor or Employee? 

When deciding whether to hire an IT contractor or employee, there are a few questions you can ask: 

• How long will we need help? If > a year, consider hiring an employee. If < a year, consider a contractor. 

• Do we have a current employee who can or does have this knowledge/skill? If yes, consider using current resources or backfilling the current role. 

• When do we need help? If > a month, consider hiring an employee. If < a month, consider a contractor. 

• What are budget considerations? If your budget is set by quarter/year and subject to wide variations, then a contractor might be a better fit. 

• How important is institutional knowledge? If maintaining it is critical or if you lean heavily on proprietary systems, an employee may be a better fit. 

Final Thoughts 

Hiring an IT contractor comes with several clear advantages like flexibility, cost savings, and access to specialized skills, but there are also notable challenges, including higher hourly rates and potential integration issues. The decision should ultimately depend on your organization's specific project needs and resources.

Consider carefully whether contractors, employees, or a hybrid approach offer your team the most benefit. A blended strategy often delivers optimal flexibility, cost efficiency, and expertise, giving your business the best of both worlds.

Want to learn more about effective IT team management? Check out our IT manager resources.