IT Contractors - can be very cost effective for clients and beneficial for Contractors
When a lot of companies think of IT contractors they think
of the large daily rates and assume it is only the large Multi Nationals that
can afford to take on highly skilled Contractors.
However as companies research temporary and contract options
in more detail they are starting to realise that the cost is not as prohibitive
as they first think. When they factor in the flexibility it offers they realise
it is actually a very realistic and cost effective option particularly for
areas such as hard to find IT skills.
A typical daily rate of €400 would cost the company a
maximum of €90,000 over a 12 month period. This is arrived at by calculating the
cost over 45 weeks. (52 weeks less the 4 weeks holidays , 2 weeks of Bank
holidays + 5 days for + sick days, funerals etc.)
When employers hear this cost they baulk at the cost and
feel they are automatically getting better value by hiring a permanent person
for the €60 to €70k. However even if you take €60k as your base figure, you
have to add Employers PRSI of 10.75%, Holiday Pay (allowing 20 days) of 12.5%
and an average Agency Fee of 15%.
This adds up to €85k and while a little cheaper you take all
the risks such as extra sick pay, someone not working out as well as you’d
hoped, training expenses, pension contributions etc.
No one would ever argue that Contract roles should replace
Permanent workers. However for specific projects and/or for difficult to find
positions the contract route can actually save you money in the long run.
For IT Contractors themselves it is very important that you get the right information but aren't paying over the odds for the information. There are numerous expenses, such as some travel, food and telephone expenses that can be legally be claimed that can significantly reduce the tax bill and thus make it more lucrative.
For more details please contact either Phil@edenrecruitment.ie or Damien@edenrecruitment.ie