Using Contractors Intelligently

From executive management's point of view, contractors solve a number of problems:

• You can bring in expertise that your current staff doesn't have already.
• If the project is falling behind, you can bring in extra hands to try to speed up the work.
• You can cut them loose at the end of the project with no impact to your permanent staff's morale.
• You don't have to pay their benefits (not directly, anyway).

The world is not as simple as contracting vendors would have you believe.

• If your staff doesn't have the expertise to understand the implementation, how will you go about maintaining and upgrading it?
• Adding more hands to a project increases the complexity in communicating requirements and managing resources. The experienced (ie, most productive) members of the staff will need to spend time and energy bringing the temporary workers up to speed enough to be able to contribute. Frequently, the overhead of additional hands actually outweighs the benefit.
• If your staff is told they have to support something they don't understand, that is probably not so great for morale.
• Do you really pay your contractors less than the fully-loaded cost of any employee? How about if you include the ramp-up and ramp-down time costs of the contractors into your calculation?

The key here is to use your contractors effectively.

• Don't use them to be the "expert" on a technology. Use them to train your staff on the technology and to work alongside your staff in designing the solution. The role of an "expert" contractor should be as a teacher and a mentor, not as an implementor.
• For contractors who are an "extra set of hands," make sure to assign them the routine, well-understood work. The training time for these tasks will be lower, since they are probably well-documented. You will be able to have more junior team members instruct the contractors on their duties, leaving the more experienced staff to push the project forward during the training interval.

There is an appropriate use for temporary workers. Using them as long-term staff replacements is not a good solution, since it is almost certainly more expensive than using internal staff. Use temporary workers either as mentors or in appropriate lower-level roles. Treat them decently, let them become part of the team. But set clear expectations, and be open and honest about where the project begins and ends. And when the project is over, let the contractors go. If that leaves you short-handed, that means you need an additional long-term employee.