Contract workers are cheaper than full time employees, and generally for the main reasons:
*Don’t have to give them insurance
*No sick leave / Holidays / Vacation
But Contractors also cost more in certain ways:
*Training – You have to train all of your new employees, and if training takes 2-3 months you are offset when it comes to work during this time period. Don’t forget about the employees who are lazier, and those that you decide not to keep.
*Constant push to find work elsewhere – the better the employee you hire is, the more likely they will not settle with a contract period. Unless they have issues that they’re trying to solve they will be pushed to find work elsewhere that isn’t “temporary.”
*Culture – You’re telling your contractors that they didn’t work hard enough to get hired on. You’re paying them less than your full time employees, and you’re not giving them the same perks, benefits, ect. And yet you expect them to work harder.
*Overtime pay to make up for the loss in production during times when you have too many new people re-training.
*Ideas – when there’s a way to make things more efficient, and even if the contractor really wants to share the idea they might decide not to. Other people get the credit / More efficient means they don’t have to be given full hours / Why go to the effort when you should be using your effort towards your long term goals. (The job is saying via the contract-ness that they aren’t going to be in your long term goals.)