I work for a contractor and I’ve always wondered why they hire us when I get paid $30 a hr and obviously my boss is making a cut on top of that. But the company I’m painting for only pays there employees $18 per hr? Wouldn’t it be easier just to hire an extra employee to preform simple tasks like painting, shoveling stone, ect these are all none skilled labor jobs.
In: Economics
It depends.
Generally a contractor is great for a high churn and high volatility business. They don’t need to carry much overhead, and have much less paperwork to chase.
Let’s say you take home $20 (easy numbers). You probably cost $40 in general expenses to whoever you work for. More if you have decent benefits.
If a firm needs a few extra bodies for six weeks (or months) to fulfill a contract, paying your contract house $45 an hour might be cheaper than risking having to lay you off in a few months because they’re not going to have work. It may still be a great deal for them because their internal payroll and accounting only needs to track a few folks, not all of the contract staff. If you’re billed out at $75 an hour theyre still making money off your labor, but moving some overhead costs to the contract company. A good HR and accounting department is expensive.
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