Tech companies that are looking to boost their bottom lines by hiring people without previous training or experience are being forced to hire contractors, and sometimes in places that aren’t even technically part of their company, a new study finds.
The study, conducted by the consulting firm McKinsey, finds that contractors, which can include freelancers, software developers, and others, are a critical part of the IT and IT services industries, as the costs of training and certifying new hires are higher than the costs for paying workers.
“The fact that contractors are often employed in places where the cost of training is higher than those of hiring them should not be surprising,” said McKinsey Senior Vice President of HR, Matt Haney, in a statement.
“These are the jobs that many companies cannot afford to ignore, and in some cases, the very ones they are being encouraged to hire.”
Companies that hire contractors have to pay them a portion of their salary, but they often only get reimbursed for a portion.
For instance, if a contractor works for a software company for a few months, the contractor’s salary will be covered by the company for about $100, but the company will only get paid $30, according to McKinsey.
In the case of a software developer, their salary will only be reimbursed after about a month, so it would only cost them $5 a month.
A new study found that a contractor’s job will only pay him $30 a month after he has trained for three months.
The study found the contractor would get paid about $6,000 a year for his skills, but would be paid $1,800 for every year of training, even after he was paid his base salary.
McKinsey also found that most contractors earn less than minimum wage.
When contractors work for a company, the majority of the work is performed by a single person, according the study.
A majority of employees work for just a single individual, the report said.
“Many companies are willing to pay a contractor to do work that may be considered lower-skilled than the work that would be done by an employee who is paid on a salary,” Haney said in the statement.
“Companies that have found that contracting out the work of their staff are more likely to pay for the labor of their workers, and they are more effective at raising wages and promoting the success of their companies.
The bottom line is that, in many cases, this is the best way to go.”
McKinsey’s study found, however, that contractors make up less than 2% of all IT workers, with the remaining 8% being the employees of the software company, but not the people working for the company.
The company pays the other 80% of the workers in the IT industry.
McKin, which commissioned the study, is an independent research firm that focuses on the business and technology sectors.
The firm was hired by the federal government in 2012 to analyze the impact of outsourcing, a practice where companies move jobs abroad and bring in cheaper workers.
It found that outsourcing increases salaries and productivity, but there are downsides, such as more work for fewer people.