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Anwar Kassab
From: Danielle <Danielle.Smallwood@tenstep.com>
Sent: Tuesday, March 05, 2013 11:06 PM
To: anwar.kassab@cmcco.com
Subject: TenStep Tip - Should You Use an Employee or Contractor on your Project?

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Organizations have many options today when determining how to staff
a project team. You can use existing employees, hire a new employee,
use contract resources, or you may just decide to outsource all or
portions of the project. These choices are the result of advances in
communications and technology, as well as the desire of companies to
be more flexible in their hiring options. Acquiring project team members
is one of the project management processes that are part of "Managing
Staff".
Determine Whether Full-Time or Contract Resources
are Appropriate
Perhaps the place to start is to understand whether there are
employees available in the timeframe needed for your project. It
usually doesnt make sense to hire contract people when you have
employees that are available and otherwise would have nothing to do
(assuming the employees have close-enough skills).
Lets assume that you do not have current employees available to staff
your new project. Lets also say you work for an organization that is
open to utilizing contractors or hiring employees depending on the
needs of the specific project. Lets look at some of the criteria that you
can use to make the hiring decision.
Urgency. If you need to get started very quickly, you may
need to hire contractors. In most organizations you can put a
call out to the local contract companies and be interviewing
people in a couple days. Most organizations cant (and dont
want to) hire employees that quickly.
Length of the need. If you need a resource for a short, finite
duration, then a contractor may be the way to go. You can
bring them in for a short contract and then release them when
the work is done. If you have a full-time, long-term need, an
employee would make more sense.
Strategic vs. non-strategic work. Many companies identify
certain types of work to be more strategic that other types. For
instance, many companies chose to staff the senior project
positions, like the project manager, with employees, and are
more willing to use contract labor to assist with project team

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members.
Skills and knowledge needed. Many companies make
decisions about staff based on the type of skills needed. For
instance, if you are moving into a new technology or new
equipment, you may hire contractors that already have the
expertise. If the skill is needed long-term you might want to
transition in some employees so that they can learn the new
skills before the contract staff leave.

Confidentiality. Many companies chose to staff positions with
employees if the project team will handle confidential or
proprietary information. There is a sense that the information
might not be confidential once the contractor leaves the
company.
Cost. With a contractor, you typically pay a higher hourly rate,
but only for the length of time the contractor is needed.
Employees may cost less in the short-term, but you are taking
on a long-term cost commitment.
If you look at the decision criteria above, you can see that much of the
answer for using employees of contractors comes down to risk. If a
project is short, it might be risky to hire an employee since you may not
be sure if you can keep the employee busy long term. If the project
involves core skills to your organization, confidential information, or is
strategic to your business, it may be too risky to hire a contactor.
Organizations tend to keep a leaner staff of core employees these days.
The core staff stays relatively constant from year to year, while
increases in workloads are staffed through contract resources.

There are many elements to Managing Human Resources. Each aspect
has a number of templates. Click here to review the Manage Staff
template bundle. Almost 50 templates in all.

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