Managing labor costs is essential to keeping your company finances on track and maximizing profitability. One strategy for reducing these expenses – not to mention gaining more flexibility in the process – involves hiring project-based employees (a.k.a. contract workers).

This option is typically less expensive than full-time employees for a few reasons:

Less red tape. With contract workers, you don’t pay local and federal payroll taxes, unemployment insurance, disability, workers compensations, and the host of other costs that come with being an employer. The contractor is considered “self-employed” and responsible for paying for many of these on their own.

No benefits required. Benefits are a big financial consideration when hiring full-time employees. That’s not the case with contract workers. In fact, you don’t have to worry at all about perks like health insurance and paid time off. If the contractor works through a North Houston contract staffing agency, then the agency might offer these benefits. For you, though, you simply pay the contractor the agreed-upon fee that was previously negotiated.

More efficient hiring. When you partner with a reputable staffing agency in North Houston to hire contract workers, you can also cut cost-to-hire. The agency will source, screen, interview, and skill test candidates on your behalf and can even conduct background and reference checks. With a network of both active and passive candidates to tap into, they can often perform this job faster and more cost-efficiently than many companies can do on their own. You can save money during the hiring and onboarding process, as a result, while still gaining access to the talent you need.

The bottom line? With contract workers, you can reduce costs significantly, all while gaining manpower to complete projects. Not only that, but you can actually improve your financial outlook with project-based staffing. For instance, you’ll have a workforce that’s more adaptable and flexible. That means you can easily take on new initiatives without increasing overhead. Simply bring project-based people on board for a specified period of time to complete work or access specialized skills.

One word of caution: Always make sure you’re classifying employees and contractors properly. Classifying regular employees as contract ones can land you in legal hot water with the IRS. If you are found guilty of such a misclassification, you’ll also have hefty fines to pay on top of that. To avoid this happening to you, work with an experienced contract staffing agency in North Houston. They can offer you guidance and advice, so you can leverage the many cost-saving benefits of contract workers in a way that’s legal.

Ready to get started?

Kingwood Personnel is here to help. For more than 30 years, we’ve been placing highly-qualified professionals in a variety of short and long-term temporary and contract positions with many of North Houston’s leading companies. We work with companies of all sizes, from Fortune 500 corporations to small and mid-size businesses. If you’d like to learn more, connect with our team today.