Should you convert your contractor to a full-time employee? Find out why you should or not and how it works best for your business

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Contractors converting to full-time employment: Worth it? 

Ever so often, companies come across exceptional talents that are freelancers or contractors and decide it’s more beneficial to leverage their talents in a full-time capacity. What does this process entail and why would companies choose to do that? Learn the benefits and more here.

The skill and credibility of an independent contractor has captured your attention and you feel that this individual would really benefit from working in your company. What are the next steps you need to take in order to help him/her secure a position at your workplace? In fact, why convert them in the first place when things seem to be okay where they are? We examine situations in this article where it is better for companies to start converting to full-time employment

Why convert a contractor to a full-time employee?

When the laws call for it

Companies tend to have a lot of people joining and leaving, and sometimes, errors occur where an employee is misclassified as an independent contractor. In some countries, this constitutes a serious offense and could result in hefty fines. One famous example is Uber which was forced to pay some $100 million settlement to more than 385,000 drivers due to reluctance to acknowledge its driver community as employees. 1 To avoid these complications, some organisations have been known to classify all their workers as full-time employees. 

When you want exclusivity

Some contractors just have that spark of genius in them you can’t afford to lose. Getting them to join your company now is better than losing them to a competitor later. This is where converting a contractor will help the individual solely serve the purposes of your organisation and no other. In return, they will enjoy other perks like social security, insurance, paid leave and other benefits.

When the contractor performs a core business service

Sometimes contractor contributions in a company become so significant that they no longer just contribute to the supplementary services of a company. Is the work your contractors do directly bringing in revenue towards the company? If so, it’s time to relook at their contributions and perhaps offer them a full-time position.

When they no longer invoice you and you dictate the working hours.

Contractors tend to operate on a per project basis and not on an hourly rate like employees. This allows them the benefit of working on multiple projects. However, during the course of a project some companies discover that contractors contribute the same regular hours to their business and are beginning to operate with a consistent retainer. It is during these times that organisations should consider hiring the contractor full time instead.

Contracting vs full-time for employers

For employers, the switch between contractors and full-time employees is often a difficult decision as it often involves much needed deliberation among management level staff.

Typically, this involves discussions about cost and investment towards training, employee benefits, taxation and much more. The decision for converting to full-time employment is typically done as a reward for many in the contractor community. However, some independent contractors pride themselves in able to provide services to a wider market. This means that offers to join a company as a full-time staff need to be really compelling for contractors to be willing to sign-up. 

Need advice on whether it’s worth it having contractors converting to full-time employment?? Simply fill in the form below to get in touch with our HR experts! 


  1. Uber will pay up to $100 million to settle labor suits, CNBC

Learn more about how AYP Global Pay lets you:
  • Hire someone in a day
  • Automate global payroll & payments
  • Enable global growth and expansion
Speak to our
HR consultants today