"The only way companies can meet time-to-market pressure is by having as much as one-third of their developers as contractors," observes Dominique Black, chairman and CEO of Advanced Technology Staffing. The in-house IT team is always going to be there, but in any company, there's sometimes a big project that needs lots of people to work on it to make it happen. Contractors can deliver services that your own staff can't deliver in a reasonable amount of time. Hiring a contractor may be to help formulate a short or long-term strategy to guide your efforts, or to build a detailed plan to implement parts of a strategy already developed.

They may also be hired to provide the necessary systems expertise to build the technical foundation to support your plan. Think of this as a different, more short-term and flexible way of hiring people. Using contractors makes sense to compliment your employees' skills sets and add variable capacity to the organization. Contractor may integrate into your group of employees and act as part of a team, but is less tightly coupled to the future of the organization.


The other side of the coin

Like all good things, contractors come at a price. In return for specialized expertise and flexible scheduling, companies may have to pay contractors as much as twice the hourly wage of full-time staff members. Though the contractors come at a price, many IT managers believe that the benefits are well worth the premium. "In a direct sense, it negatively affects your budget because you are paying more," explains Alan Lubitz, chief technological officer at TermNet Merchant Services, a merchant credit-card processing company in Atlanta. "But in the sense that you get things done when you need them done, the effect is positive, especially when compared to the consequences of not getting a project done on time." Another disadvantage is a possibility of the contractors leaving in the middle of the project. Proper communication of the requirements and the duration helps to resolve this problem.


Contractors vs. Permanent

Experts say the choice between contract work and permanent employment is becoming increasingly important for technology workers and managers. Companies are willing to pay high wages to contractors who have skills the organization needs to accomplish a project, said H. Michael Boyd, an analyst at International Data Corp. of Framingham, Mass." 'If I only need the expert 10 days a year, let's figure out a way I can rent the person,' " he said. "Enough companies have decided that's the right answer."

Dr. Boyd said it would cost a company more to keep an expert on staff for $200,000 a year than to hire a consultant at a premium hourly rate for a month.

Contractors tend to provide skills in short supply to cover temporary requirements, while employees tend to have in-depth knowledge of their organization and systems.


Hiring contractors

IT managers also vary in their approach to hiring contractors. Some rely on large consulting companies, such as Andersen Consulting. Others turn to staffing agencies, while still others track down independent contractors. Parker, one of the IT managers, prefers to save time by hiring contractors through local staff augmentation companies. "They do the footwork, interviews, and figure out the contractor's background," he explains. In contrast, Bedar another manager leans toward the use of independent contractors, when they can be found. "I prefer to deal with free-lance contractors. It's more cost- effective, and they're just as good as the people you'd get through a firm" Bedar notes. He networks to find well-established independents, relying when necessary on a few staffing agencies that have proved their ability to screen candidates.

The drawback to using independent contractors is the difficulty in locating them; Lubitz, who also likes using independents, has found local user groups to be good resources. Web sites are also quickly being set up to assist in matching companies with contractors. Many IT managers, however, find such services too time-consuming and unreliable.

"We've tried looking at Web services available for hiring full-time people. The additional effort required to filter the people that put resumes up there makes it counterproductive. You have to look at so many to find a few," explains David Prager, CIO at Katz Media Group, a media representative company in New York. For similar reasons, he would not use Internet services for finding contractors. Instead, Prager prefers to pay the premium of using a staffing agency."It's quicker and takes less work to make it happen. And you end up with a longer-term relationship with the brokerage house," Prager explains. Staff augmentation companies are also popular in the face of concerns about the Internal Revenue Service's definition of an employee's status.


Relationship with the contracting firm

You should find a group that shows evidence of applicable expertise and experience and has services and capabilities that relate directly to your situation. You'll want to establish a relationship with an individual who is a principal of the firm and accountable for the success of your project, voice all of your expectations and communicate, communicate, communicate. Communication and involvement are the two most important factors in shaping the success of consulting projects. Communication pathways and methods are set up during project planning. Communication processes internal to the project focus on coordination, communicating about expectations, and escalating issues for resolution.

Cultures with flexibility, openness, and the desire to gain additional perspectives on their most persistent problems make effective clients. It's also very helpful if the client can integrate their own people into the project team based on earned trust and mutual respect. As a consequence, engagements with clients like these are lower risk, have better quality results, and provide substantial knowledge exchange.