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Should You Rent or Own Your Employees?


We all (unless you read these articles for sport) work for a living. We’re programmers, analysts, operators and managers. We write RPG code, mount tapes, perform appraisals and meet with users. Regardless of our titles, we work and get paid for our work. My question in this article is: What’s your status? Are you an employee of an end-user company? Do you work for a consulting company? Are you an independent professional? These are fundamental questions about how we work—let’s discuss the advantages and disadvantages of renting your workers or buying your workers.

And in the spirit of full disclosure, I’m a consultant.

Renting vs. Owning

Let’s first define the terms renting and owning. When I talk about renting an employee, I mean using a person as an employee (directing their work), but that person is not part of your company. The person may be an independent contractor or an employee of a consulting or contracting company. The rented employee is providing services to your company but isn’t being paid directly (as a W-2 employee). When I mention owning an employee, I mean a person who’s a direct employee of your company, earning a paycheck, getting benefits and having taxes withheld.

Rent the Employee

Why would you want to rent an employee? What are the conditions that would lead a company to look outside for labor rather than to its own people? I find that different companies have hired me for different reasons over the years. Some reasons why a consultant or contractor is used include:

  • To provide additional labor—sheer hours performing a role
  • To provide increased expertise—supplying skills that aren’t available
  • To handle tasks that are one-time in nature

Michael Ryan is a technical editor with IBM Systems Magazine. Michael can be reached at michael@ryantechnology.com.


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