Many companies still think of contracting as an IT-only solution. While it’s true that software and digital projects made it popular, today the model is used far more widely. Nowadays, more and more businesses bring in contractors to access skills when time, budget or headcount are tight. In fact, MBO Partners reports that almost half of global companies already use contractors in at least one department. And for good reasons.
Let’s see what contracting really is (and isn’t), how to approach it, and when to use it.
What is Contracting
When recruiters talk about contracting, they mean hiring talent on a fixed-term or project basis. This can be a single specialist or an entire team.
Unlike permanent employees, contractors aren’t bound by long-term employment agreements. They provide defined skills for a set duration, often through recruitment agencies. Think freelancers, but also professionals who work full-time—just not indefinitely.
Key Differences Between Contractors and Full-Time Employees
| Contractors | Full-Time Employees |
| Hired for a specific project or period | Hired for an ongoing role |
| Work is short-term and focused | Work is long-term and integrated |
| Usually self-managed | Managed as part of the company structure |
| Paid a higher hourly/daily rate | Paid a fixed salary with benefits |
| Engagement ends at project completion | Employment continues until notice or resignation |
For companies, the choice depends on the nature of the work: ongoing and core, or temporary and specialized.
| Is Contracting Only for IT?No. While IT made contracting mainstream, it’s now widely used in other industries. Marketing teams bring in external campaign leads. Finance departments contract auditors during peak season. Hospitals hire locum doctors. Construction firms engage engineers for specific project phases. Legal and compliance teams use contractors to adapt to regulations.The logic is consistent: when demand is temporary, unpredictable, or highly specialized, contracting is often the smarter choice than permanent hiring.For more about different situations and industries that can benefit from contracting, read our article on 7 unexpected situations where a contractor might work better than a full-time employee. |
What Industries Use Contracting?
Contracting in Marketing and Creative Roles
According to LinkedIn’s Future of Skills report, marketing is among the top five sectors using freelance and contract work globally.
Campaigns and launches often require skills that companies don’t need year-round. Hiring a full-time campaign strategist, writer, or video producer for a 3-month campaign doesn’t make financial sense. Contractors deliver the project and exit once the work is done.
Example scenario: A retail company launching a seasonal product contracts a digital marketing manager for four months. The contractor sets up performance campaigns, hands over reporting processes, and exits once sales stabilize.
Contracting in Finance and Accounting
Finance workloads are rarely constant. Audit periods, tax deadlines, or mergers require extra hands. Contracting controllers, analysts, or tax consultants covers the peaks without adding permanent staff.
In fact, a recent Robert Half survey reports that many companies are increasingly using contract and project-based talent to manage fluctuating workloads and skill gaps
Example scenario: A Polish manufacturing group contracts two auditors during year-end reporting. Their involvement shortens the audit timeline by three weeks compared to the previous year when the internal team worked alone.
Contracting in Legal and Compliance
When regulations change, companies often need temporary expertise. Hiring a full-time compliance officer isn’t always justified if the need is project-based.
Example scenario: An export company facing new ESG requirements contracts a compliance consultant for a four-month project. Deliverables include policy rollout, staff training, and third-party audits. After completion, the consultant exits.
Contracting in HR and Recruitment
HR and recruitment teams also face spikes in demand. Contractors can step in as interim HRBPs, high-volume recruiters, or HR project managers to handle surges, system rollouts, or cover for absences.
Example scenario: A large company rolling out a new HRIS system contracts a project manager for six months. The contractor oversees implementation, vendor coordination, and staff training, while the internal HR team continues to manage day-to-day operations.
Contracting in Healthcare and Life Sciences
Healthcare depends heavily on contracting, though it often goes unnoticed. Beyond clinical staff, hospitals and pharma companies contract IT project managers, data analysts, or compliance officers during digital or regulatory transitions.
Example scenario: A hospital implementing a new patient management system hires a contract project manager for nine months. The role ends once the system goes live and staff are trained.
Why Do Companies Hire Contractors Instead of Employees? (Business Benefits)
Companies turn to contractors when the benefits outweigh the effort and cost of permanent recruitment.
As remote and hybrid work gain traction, contracting aligns perfectly with organizations seeking a global, distributed workforce. Platforms like Upwork and Fiverr have normalized freelance work, showing employers that flexible hiring is both efficient and sustainable. Agencies can integrate these practices into formal recruitment strategies.
- Faster access to talent
Contractors are often available within days or weeks. Traditional recruitment takes months. For time-sensitive projects, speed is the deciding factor. - Lower overall cost
A contractor’s daily or monthly rate may seem high, but companies avoid benefits, training, and long-term overhead. Research shows that workforce flexibility through contracting can cut employment costs by 20-40% (Yellow). - Flexibility during uncertain times
Contractors can be released at the end of a project with no notice or severance obligations. This is valuable when budgets are tied to projects or when the business outlook is unpredictable. - Access to niche skills
Many roles are too specialized to justify a full-time hire. Contracting allows companies to bring in knowledge for a limited time (such as a BIM consultant in construction or a compliance expert for a regulatory rollout). - Covering peaks and absences
Seasonal demand, maternity cover, or sudden growth often require temporary reinforcements. Contractors provide continuity without long-term payroll commitments. - Bypassing hiring freezes and headcount limits
In many corporations, HR budgets or headcount caps block permanent recruitment. Contractors, engaged as service providers, are outside those limits.
In short, contracting gives companies speed, control, and reduced risk. It’s a practical choice when hiring permanently would be slower, costlier, or simply unnecessary.
Different Contracting Models Comparison: What to Choose and When?
Contracting takes different forms depending on goals, risk, and budget. Below is a comparison of the main models companies use across industries.
| Model | Description | When to Use | Cost Structure | Example |
| Performance-Based | Contractor is paid based on achieving agreed outcomes, not time spent. | When results are measurable and accountability is critical. | Fixed fee or variable fee linked to results. | Logistics firm pays for reduced delivery times, not hours. |
| Vested Outsourcing | Long-term partnership with shared risks and rewards, aligned on business goals. | When you want a strategic, ongoing collaboration. | Shared savings or profit-sharing models. | Manufacturer shares efficiency savings with supplier. |
| Try & Hire | Contractor starts on short-term basis with option to convert to full-time. | When testing a role or candidate before committing. | Contractor rate initially, then salary if hired. | Company contracts a finance analyst for 6 months, then hires full-time. |
| Project-Based | Contractor delivers a clearly defined scope within a set timeframe. | When work has a clear deliverable and end date. | Fixed fee or hourly/daily rate. | Marketing firm contracts a strategist to run a 3-month campaign. |
