Myths and Facts About Hiring a Contractor

Jan 31, 2023

Introduction

Hiring a contractor to work for you on a specific project could raise heaps of questions, especially if it’s new territory for your business.

 

By reading this article, you’ll be able to understand some of the most common myths or misconceptions about hiring a contractor and decide if it is still the right decision for your business.



Who are contractors?

Although there are a few definitions of the word ‘contractor’ when it comes to the technology and professional world, contractors are generally independent professionals who offer their services to a business at a fixed hourly or daily rate, short-term or long-term.



Contractor vs Employee in NZ

Among the benefits for contractors in NZ, is the autonomy and flexibility that comes with contracting. The downside is they do not receive the same benefits as a regular employee (i.e., health care/insurance and paid  time off i.e., annual leave or sick leave).


Hiring a contractor is common for companies who want to save money, scale their business, or require flexibility in their workforce.


Here are some of the most common myths about hiring a contractor and the truth behind them:



Myth #1: “Complicated and costly.”

Fact: Not always true.

Talent services or agencies like Recruit I.T. help companies scale their business, by enabling the cost-effective hiring of contractors.


Compared to a regular employee, hiring a contractor could save you money as you only pay for their hourly rate without having to cover their health insurance, annual leave, and other benefits.


Partnering with a recruitment agency like Recruit I.T. to assist in hiring a contractor can also open up new opportunities to secure suitable talent when there are certain shortages of skills onshore – they can leverage their networks to help you source international candidates abroad. Everything is done for you – from sourcing, screening, to onboarding.


Less hassle on your end, less complicated, and cost-effective.


 

Myth #2: “Invoices take too much time and effort.”

Fact: You don’t have to do this tedious task; your partner agency can help look after the admin.


Recruit I.T. is BTCI (Buyer Tax Created Invoice) approved by the Inland Revenue Department.


We provide your contractors with an invoice, minimising effort, and problems on your end. We also use cloud-based timesheets and pay slips for contractors so it’s easier to manage and distribute.


Much of the admin is done by us, so you won’t have to worry about any of these technical and time-consuming tasks!



Myth #3: “Less efficiency / I won’t find the skills I need for the job.”

Fact: Contractors have already built and mastered their skills through years of experience.


Most of these independent professionals are sought-after, especially in competitive fields like IT. Plus, if you partner with an agency like Recruit I.T., a thorough screening and selection process will be conducted before onboarding to ensure the quality of contractors you will receive.


 

Myth #4: “Contractors are only for short-term work.”

Fact: You can hire independent contractors even for projects that will take years.


Not all contractors are only in it for a short ride – some of them offer their services for longer periods; with some even happy to commit to projects that will take years to complete.


Contractors are also keen on working with clients whom they’ve already built a relationship with.


When hiring a contractor through Recruit I.T., you automatically have access to our carefully curated networks and talent pools. . This will help you build and establish strong relationships with contractors and easily connect with them in the future.



Myth #5: “Managing contractors is hard.”

Fact: You can always rely on your agency to communicate with your contractor and discuss your requirements.


But always remember: communication plays a crucial role in building all successful client-contractor relationships.


Start by defining your goals, vision, requirements, and expectations at the onset of the contractor hunt. Be specific with your job descriptions so your agency can connect you to the best candidates.


Once applicants are screened and a contractor is chosen, you and your partner agency can draft a detailed contract defining the scope, goals, and requirements of the project.


Always be clear and intentional when communicating with your contractor to minimise problems in the long run.



Myth #6: “Project-based economy is not sustainable; it’s temporary.”

Fact: If you’re still caught up in the past, it’s time to be more open-minded and consider other ways to scale your business for success.

 

Contrary to popular belief, a project-based economy is here to stay. If you don’t adapt, you’ll be left in the mud.


Many traditional employees are starting to go contracting as they realise the demand for project-based opportunities at the height of the Covid-19 pandemic.


At present, more and more professionals want to work as a contractor for a more flexible, agile, and high-paying career.


Benefits of hiring a contractor through Recruit I.T.


  • Recruit I.T. will serve as the intermediary and an advocate for your business to find the perfect contractor to work on your project.
  • We have a dedicated group of Consultants who are constantly looking for talent and suitable contractors for every project-based opportunity you may have. You will have access to a wide pool of talent across the globe whenever you may need it.
  • Less burden and hassle on your end as all payroll work will be done by us. We prepare and process invoices and use cloud-based timesheets and pay slips which are readily available for your contractor to view at any time.
  • Less exposure to risk as we’ll be the ones sourcing, screening, and onboarding the candidates.


If you want to know how you can hire contractors or source international talent to fulfill your business goals and project objectives, get in touch with one of our Consultants or visit our website: www.recruitit.co.nz.

Re-entering the Job Market: A Guide for Experienced IT and Technology Candidates in New Zealand

27 Mar, 2024
Entering the job market after many years can be a daunting task, especially in the fast-paced world of IT and Technology. With advancements happening at breakneck speed, it is understandable to feel overwhelmed when suddenly thrown into starting your job search journey anew. However, there are simple steps you can take to get you started, ease the transition, and help you in landing your new dream job. At Recruit I.T., we've seen many experienced candidates successfully navigate this path, and we're here to share some valuable advice with you. 1. Revamp Your CV Your CV is your ticket to securing interviews, so it is crucial to ensure it’s up-to-date and tailored to the roles you are applying for. If yours is still in typewritten format and doesn’t include what you’ve been up to for the last 10 years, now is the time to get it updated. Ensure it includes your most recent and relevant roles, delete your high school work experience, and highlight your relevant experience, skills, and achievements prominently, focusing on how they align with the requirements of the positions you're targeting. If you are unsure where to start, collaborating with a specialised recruiter like Recruit I.T. can provide valuable insights and guidance in crafting a compelling resume. 2. Leverage Your Network Don't underestimate the power of networking, especially in the tight-knit IT and Technology community in New Zealand. Reach out to former colleagues, mentors, clients, and industry connections to let them know you're actively seeking opportunities. Attend industry events, meetups, and conferences to expand your network further. Many job opportunities are filled through referrals, so make sure to stay connected and keep your network informed about your job search. 3. Explore Both General and Specialised Job Boards You may have found your first job via a newspaper classified, but times have changed! While general online job boards like Seek and Trade Me, as well as LinkedIn Jobs are a good starting point, consider exploring specialised job boards focused specifically on IT and Technology roles, and register with a relevant recruitment agency like Recruit I.T. as specialised platforms like our website job board cater to this niche market, offering a curated selection of job openings tailored to your expertise. By targeting your search on these platforms, you increase your chances of finding roles that align with your skills and career goals. 4. Prepare for Interviews Brush up on your interview skills to ensure you make a strong impression during the selection process. Research the company and the role thoroughly, familiarising yourself with STAR and behavioural-based interview techniques (there is lots of info online!), practising common interview questions, and preparing examples that highlight your abilities and experiences. Additionally, familiarise yourself with the latest industry trends and developments to demonstrate your awareness and relevance in the field. It also won’t hurt to review and brush up on your verbal and numerical reasoning skills – once again, there are lots of free resources online to help you practise these types of tests/exercises. 5. Update Your Skills The IT and Technology landscape evolves rapidly, with new technologies and methodologies emerging regularly. Whilst you’ve developed your abilities on the job, do take the time to update your skills and knowledge with formal certifications and training to remain competitive in the market. Consider enrolling in courses, attending workshops, or pursuing certifications relevant to your field. Not only does this demonstrate your commitment to growth, but it also enhances your attractiveness to potential employers. 6. Be Flexible and Open-Minded The job market can be unpredictable, so it's essential to remain flexible and open-minded throughout your job search. Be willing to consider different roles, industries, or a short-term contract opportunity that may not align precisely with your previous experience. Embrace new challenges and opportunities for growth, as they can lead to unexpected career advancements and personal fulfilment. 7. Seek Guidance from Experts Navigating the job market alone can be overwhelming, especially after being out of the game for some time. In many cases, if your position has been made redundant, your organisation may provide outplacement services to offer help with CV crafting, interview prep, job search, practise testing and in some instances will also provide free access to training platforms. Consider seeking guidance from experienced specialised recruiters like our Recruit I.T. consultants. Our team possesses in-depth knowledge of the IT and Technology industries, along with extensive networks and resources to support your job search journey. From resume optimisation to interview preparation, we can provide valuable assistance every step of the way. Utilise all the free and skilled help you can access! 8. Embrace Your Experience and Life Skills It's easy to feel apprehensive about re-entering the job market after a long tenure with a single company or a prolonged absence, but remember to embrace the wealth of experience and life skills you've accumulated over the years. Your past successes, whether in your career or personal life, have equipped you with valuable insights, problem-solving abilities, and resilience that will be sought-after and appreciated by employers. While you may not have a recent job application or job hunt history, your track-record speaks volumes about your capabilities and adaptability. Have confidence in your abilities, and don't underestimate the value you bring to the table. Highlight your accomplishments and transferable skills during interviews, showcasing how they make you an asset to any organisation. By owning your experience and life skills, you can instill trust and credibility in potential employers, setting yourself apart from other candidates in the competitive job market. Embarking on a job search journey after many years can be a challenging yet rewarding experience. By revamping your resume, leveraging your network, exploring job boards, preparing for interviews, updating your skills, remaining flexible, seeking guidance from experts, and remaining confident in your experience and skills, you can increase your chances of success in the competitive New Zealand job market. Remember, you are not alone in this journey, and with the right support and resources, you will find your next opportunity. Our team are always happy to shout the coffee and provide some expert friendly and constructive advice to help you get started on your job hunt, so reach out anytime!

March 2024 I.T. & Digital Market Update

By Kaleb Leeming • 11 Mar, 2024
Field at Present: From a Director’s Perspective Generally, we have seen a slow start to the year, continuing the trend we saw in the latter half of 2023. Despite feedback from the market that suggested a stronger bounce back, we have yet to see this in the market at present. There are pockets of activity - primarily back-fills to existing hires. As we gear towards the backend of the government’s 100-day plan, we should see the firming up of new projects and programmes, which will likely require capability to deliver these pieces of work. Unfortunately, we are still seeing organisations across a range of industries forced into making rounds of redundancies and other operational cuts or changes to help them operate more leanly during challenging times, and we’ve even seen this in the recruitment industry itself.

The True Cost of a Contractor

By Kaleb Leeming • 14 Feb, 2024
With the dynamic business landscape, many companies are embracing flexibility and adaptability as they navigate the ever-changing market. As someone who has worked in the technology and recruitment sector for a while, I’ve come across a common misconception that I’d like to address: the perception that contractors are significantly more expensive than permanent employees. I'd like to give light to the true cost of hiring a contractor and explore why it might be more budget-friendly than you think. Let’s start by acknowledging the elephant in the room – the hourly rate. It’s no secret that contractors often come with an hourly rate that seems higher than what you’d pay a permanent employee. But here’s the thing: an employee salary is just the tip of the iceberg. When you hire an employee, there’s a whole set of additional costs and overheads that can significantly impact on your bottom line. Let’s break them down: 1. ACC (Accident Compensation Corporation) When you employ a permanent employee, you’re obliged to contribute to ACC levies. These can add up and represent a substantial ongoing cost to your business. Contractors, on the other hand, handle their own ACC payments, freeing you from this financial burden. As I write this it sits at approx. $0.63 per $100 of payroll. Example being, a $100K Salary = $630 per annum. 2. Kiwisaver Permanent employees are entitled to Kiwisaver contributions from their employers. While it’s a great benefit for them, it’s an added cost for your business. Contractors manage their own retirement savings, releasing you from this expense. At the minimum contribution of 3% that is $3,000 based on a salary of $100,000 per annum. 3. Training and Development Investing in the professional growth of your employees is essential. However, it can be costly and time-consuming. Contractors typically bring their existing skills and experience to the table, minimising the need for extensive initial training and ongoing development programs. Various benchmarks have this between 1% - 5% of an individual’s salary. Based on a $100,000 per annum this could be between $1,000 - $5,000 per annum. 4. Fringe Benefit Tax Providing certain benefits to your employees can trigger fringe benefit tax liabilities. Contractors are not subject to this tax, which means you can offer perks without worrying about additional financial implications. 5. Benefits Permanent employees often receive benefits such as health insurance, paid annual leave, and more. While these are important for staff retention, they can substantially increase your personnel expenses. On the other hand, contractors manage their own benefits and extras, giving you more predictability in your budget. 6. Insurance A business is responsible for looking after professional indemnity and public liability insurance which cover their permanent employees. On the flip side, contractors typically have their own insurance coverage, reducing your insurance-related costs. 7. Overheads Beyond the salary, permanent employees come with a host of overheads like office space, equipment, and administrative support. Contractors usually operate independently, sparing you from these additional expenses. 8. Productivity It is not as simple as multiplying a contractor’s rate by the number of hours in a week, and then extrapolating that out for the year. They only get paid for the hours they work, which doesn’t include any annual leave, sick leave, or public holidays. You only pay them based on what the hours they actually worked. So, what’s the bottom line? Hiring contractors can be a cost-effective choice when you consider the bigger picture. While the hourly rate may seem higher, it’s essential to factor in the myriad of savings associated with not having to manage all the costs and overheads that come with permanent employees. Don’t get me wrong – permanent employees are valuable assets to any organisation. They bring stability, commitment, IP retention, and a sense of belonging to your team. But the key is understanding the differences between contractors and permanent employees and leveraging them to your advantage. Think of hiring contractors as a strategic move that provides the flexibility to scale your workforce up or down as needed, without long-term financial commitments. It’s not about one being better than the other; it’s about making informed choices that align with your business objectives. So, the next time you consider bringing in a contractor, remember the true cost isn’t just about the hourly rate- it’s about the holistic value they bring to your organisation.
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