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A Beginner's Guide: Hiring a Contractor

about 2 months ago by Theo Walsh

A Beginner's Guide: Hiring a Contractor

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In the ever-evolving landscape of the modern workforce, the need for contract resource has become integral for many businesses. Whether you require a highly specialised skill set for a project with a finite timeline or seek a heightened level of adaptability, especially amidst uncertainty, that permanent employees cannot offer, contractors often present a highly valuable solution.

However, for some, the practical aspects of hiring a contractor may appear daunting. Questions such as "How do I engage a contractor?", and "Which approach best suits my hiring needs?" may arise. Navigating the realm of contract-based recruitment is, in reality, more straightforward than it may seem. This article offers a simple introduction to hiring contractors and explores:

  • Methods of engaging contractors (fixed-term contract vs. day-rate interim)

  • Pros and cons of each method

  • Deciding which type of contractor to hire

There are various methods to engage a contractor, but the most common ones:

1. Fixed-Term Contracts (FTCs)

Individuals working under fixed-term contracts are considered employees of the end client and enjoy employee rights along with associated costs to the business. These employment agreements have a predetermined duration, typically lasting for six months or more.


  • Clarity & Structure: FTCs provide a clear timeline for the engagement, making them suitable for cases where the contract's scope and duration are well-defined, such as a 12-month maternity cover.

  • Contractor embedding into a team: As contractors working on FTCs are employees of an organisation, they tend to fully embed with that team/business during their contract. This can improve the culture and team morale.


  • Lack of Flexibility: FTCs designate a fixed time period for the engagement, which may not align with the often uncertain scope and duration of project-led work.

  • Desirability: Typically FTCs are less appealing to contractors as they don’t get the financial reward of a day rate contract, nor the job security or internal advancement opportunities of a permanent role. This can lead to clients not having the choice of the best contractors on the market as they often prefer day rate roles.

2. Day-Rate Interim Contracts

Day-rate contractors are specialists who work independently and provide advisory services. They typically leverage skills acquired from previous contracts to quickly integrate into a project environment and ensure milestones are met. When operating through a Limited (Ltd) company, they do not possess standard employment rights, and the only cost to the end client is the daily rate and any associated recruitment fees (if they engage through an agency). When working through an umbrella company, the contractor has employment rights from that entity, but there are no additional costs or employer responsibilities for the end client.


  • Flexibility: Hiring on a day-rate interim basis allows for workforce scalability, making it an excellent choice for businesses facing fluctuating workloads and changing circumstances.

  • Bypassing Hiring Freezes: In cases of recruitment freezes, businesses can still hire interim resources without impacting employee headcount.

  • Time Efficiency: Interim managers can usually start swiftly, either immediately or within a week!

  • Cost Efficiency: Clients only pay for the days worked by a contractor, potentially saving costs during slower periods. There are no employee benefits or additional employment expenses. When using an external agency, clients also avoid a one-off recruitment fee.

  • Specialisation: Interim contractors often possess extensive expertise, bringing unique experiences from previous engagements and applying these to new projects.

  • Upskilling Teams: Interim professionals are typically highly experienced and can enhance the skills of team members, leaving the team better equipped after their departure.


  • Longer-Term Commitment: Interim contractors are usually provided with an estimated timeline for their services, which may not be guaranteed. If circumstances change and you wish to extend their engagement, the contractor is not obligated to do so.

  • Notice Period (Pro and Con): Interim contractors typically have short notice periods (usually one week). This can result in the contractor leaving before a project is complete, potentially causing a vacancy and the need for a quick replacement. However, this short notice period can also benefit clients, allowing them to offload an interim contractor at their convenience, such as when a project's duration is shorter than initially anticipated.

3. Deciding Which Type of Contractor to Hire

The table below is a quick guide demonstrating which contract type suits different business needs.




Assignment Length


Flexible. Anywhere from 2-weeks to 2-years

Candidate Payment Frequency



Candidate Payment Method

On payroll (PAYE)

Via an agency, either a Limited Company (Outside IR35), or Umbrella Company (Inside IR35)

(Typical) Notice Period




Applicable to all levels of candidate seniority

Typically focused on executive and senior-level positions


Business as usual positions such as a maternity covers, rather than change/transformation projects

Long-term employee absence

FTCs are more likely to be positions requiring line management & any other employee-related responsibilities, e.g., performance reviews

Any other well-defined time period during which a contractor is required

Project work

Change programmes

Headcount restrictions and restructuring

Stopgaps during permanent recruitment

Workload fluctuations (e.g., increased seasonal work)


In summary, hiring day-rate interims can be highly valuable and has distinct advantages over the fixed-term contract route. The flexibility they offer in scaling the workforce, the ability to bypass hiring freezes, cost efficiency, and their specialisation in various fields make them a compelling choice for businesses looking to meet their specific needs. While fixed-term contracts have their place, particularly in scenarios with well-defined timelines, day-rate interims shine as a dynamic and adaptable resource for the ever-changing demands of the modern workforce. It’s important to be mindful of your circumstances when deciding how to bring in a contractors. Should you explore the day rate interim route, it's critical to understand IR35 and the importance of conducting an IR35 assessment before engaging with an interim manager. We can advise on this process and guide you through to make sure the correct outcome is reached.

With over 45 years’ experience in contract-based communications recruitment, VMA GROUP’s contract team is well-placed to support organisations of all shapes and sizes . If you have any contractor requirements and want the highest calibre of candidates, please contact our head of department, Matt Gibbs on


VMA GROUP is a leading international interim, contract, temporary and permanent recruitment and executive search specialist. We are specifically focused on providing support to the communications, marketing, digital and change communities.

Our specialist practice areas cover: communications, corporate communications, internal communications, change communications, PR, media relations, financial communications, CSR, public affairs, investor relations, marketing, brand, digital marketing and agency services.

We have a reputation for providing expert consultancy services and advice, supported by in-depth knowledge of the professions we recruit for. Our thought leadership and benchmarking studies have become go-to resources for the communications, marketing, digital and change industries, supporting planning and decision-making for organisations of all shapes and sizes.

In the UK, VMA GROUP has offices in London, Bristol and Manchester and in Europe, VMA GROUP has offices in Amsterdam and Brussels, but we work with organisations and individuals on a global basis.

VMA GROUP is committed to equal opportunities and is an Inclusive+ Recruiter