Full-time hire vs. contractor: a cost breakdown beyond the salary figure

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When companies compare contractor rates to employee salaries, they often overlook the true fully-loaded cost of a full-time hire, which typically runs 1.25–1.4 times the base salary after payroll taxes, benefits, and equipment. Recruiting fees alone can add $35–45k per senior hire, and a two-to-three-month vacancy means a quarter of roadmap potentially delayed. Contractors, by contrast, carry no recruiting overhead, can start within days, and allow teams to scale down without severance or legal exposure when a project ends. However, contractors come with their own trade-offs, including onboarding time, ongoing management, and knowledge loss when the engagement concludes. The article concludes that full-time hiring makes sense for long-term core roles, while contract engineers are better suited to time-bound projects, specialized skills, or urgent capacity needs.

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