How to Hire an IT Contractor for The First Time: Step-by-Step Guide

Hiring an IT contractor can be a complex process, but breaking it down into manageable steps makes it more clear and even exciting. According to ISG 92% of G2000 companies already prefer IT outsourcing. Moreover, nearly 90% of enterprise employers this year claimed they are switching focus, and thus funds, from permanent employees to contractors. When you know how to hire an IT contractor and implement this practice in your business, it can become one of the best ways to preserve the budget of a company while still completing the plan and getting the job done.

My name is Alex Novokreshchenov, I’m the CEO and Founder of Code2day. With over 7 years in the recruiting industry, I know firsthand how to hire an IT contractor.

In this article, I will go through the main aspects to take into account while hiring an IT contractor. You will learn where to look for certified and experienced IT contractors, how to verify their credentials and skills, and what the expected remuneration of IT contractors across different countries is.

I will also share some tips on how to smoothen your hiring journey while unveiling the subtleties of the hiring process at Code2day.

1. How to Hire an IT Contractor: 7 Main Steps 

If you want to hire an IT contractor for the first time, it is important to take some time for preparation. In order to find a specialist that will suit your goal best, define what type of project it is and what purposes your cooperation with an IT contractor will serve.

It is better to be picky while choosing an IT contractor to work for you, even if you are consulting reliable sources and certified recruitment agencies. In the list below, I will explain the proper steps toward finding and making a deal with an IT contractor that will meet all your project requirements.

Step 1: Analyze Your Needs

First things first. To find the perfect IT contractor, it’s important to lay a solid foundation by analyzing your needs. Here’s the homework you should do before searching for a candidate:

• Define goals, scope, and requirements. This clarity will guide you in identifying the right contractor who can meet your needs effectively.
• Define skill and expertise. Whether you need a specialist in a particular technology or a person like a Swiss Army knife, identify the specific skills and expertise you’re looking for.
• Set your budget and timeline. Understanding your financial and time constraints will help you find a contractor who can work on a project and you stay on track and within budget.

Step 2: Choose the Right Recruitment Partner

Look for a recruitment partner with solid IT industry experience. First of all, their understanding of the field’s unique challenges will be far more in-depth. Secondly, often IT staffing and recruitment agencies handle lots of work that you probably don’t want to handle, like:

• Pre-screening
• Paperwork
• Documentation

At Code2day, we go the extra mile. We tap into top talent, screen and shortlist candidates, give you solid recommendations, and even handle offer negotiations. We take care of all the paperwork so you can focus on finding the perfect contractor who fits your needs.

Here are the platforms where you can search for staffing and recruitment partners: Clutch and GoodFirms. I suggest paying attention to their industry experience, number of reviews, relevant cases, reputation, network access, and transparency of processes.

Step 3: Choose the Type of IT Contract

Once you’ve picked the recruitment partner, the big process of hiring an IT contractor starts. With all the requirements you listed earlier, now you can decide on the right type of IT contract. There are a few options, each suited for different situations:

• Project-based contracts are perfect for well-defined tasks with clear deadlines. You hire a contractor to complete a specific project, and once it’s done, so is the contract.
• Statement of Work (SOW) contracts outline the project’s scope, deliverables, timelines, and responsibilities in detail. These are ideal for complex projects where clarity and precision are key.
• Contract-to-hire agreements give you the flexibility to bring a contractor on board with the potential to hire them permanently. This is great if you want to test the waters before making a long-term commitment.

At Code2day, we help you navigate these options to find the best fit for your needs, ensuring that the contract type aligns perfectly with your project goals and timelines.

Step 4: Prepare Legal and Paperwork

Before you bring an IT contractor on board, we make sure all the legal aspects and paperwork are in order.  What do I mean by this? Here are the main documents we help you to prepare:

• Contract Agreement. This should outline the terms of the engagement, including the scope of work, payment terms, deadlines, and confidentiality clauses.
• Non-Disclosure Agreement (NDA). To protect your company’s sensitive information, an NDA is crucial.
• Statement of Work (SOW). This document specifies the detailed work requirements, deliverables, timelines, and responsibilities.
• Tax Forms. Depending on your location and the contractor’s, you might need to prepare forms such as W-9 (for U.S. contractors) or W-8BEN (for international contractors) to comply with tax regulations.
• Invoice Template. Provide a standard invoice template to ensure consistency and clarity in billing.

Step 5: Set Job Listing Criteria

At this stage, we help you craft a detailed job description that clearly outlines the responsibilities and expectations. We take your requirements as the foundation, that’s why it is so important to devote time and list your requirements at the first stage.

Step 6: Select the Candidate

Once you have your job listing, it’s time to source and screen candidates. At Code2day, we conduct thorough interviews and evaluations to assess if contractors are fit for your project. We also check references to confirm their credentials and past performance.

After a detailed screening, we give you the list of the contractors who will match your project 99%. You receive the contractor’s resumes, video presentations, and feedback from technical and HR interviewers.

Step 7: Send an Offer and Onboard the Contractor

Once we get your “yes,” we negotiate your offer with the employees and do everything possible to reach an agreement. Integrating the contractor into your team is the next step. The Code2day team will be in touch with you during the first working days to ensure that the onboarding period goes smoothly and that both you and the employees have everything you need.

We will also survey candidates and the team lead every 1-2 months during the first 6 months to make sure the onboarding is successful and to help address any issues that may arise.

2. What your business gets from hiring an IT contractor

Your business can greatly benefit from IT contractors recruitment. IT contractors are not full-time employees, which means that they require less maintenance but still bring quality work and contribute to the tech development processes of your business. Below is the breakdown of the main benefits of hiring remote contractors.

Specialized expertise

If your company is short on in-house specialists or you want to hire a project-based specialist since hiring in-house one is too costly, consider hiring an IT contractor. For example, if you want to build a cloud-based app, hiring .Net developers on a project basis is the best option. They can create cloud software architecture and help you integrate various cloud-based services.

These specialists often carry years of experience in areas like API development and cloud infrastructure, which makes them suitable for solving different issues and developing features that would otherwise take an insurmountable amount of time and money. Besides, IT contractors for hire often have experience with specific technologies, such as Azure or AWS and their know-how approach can be priceless when you require expert advice and problem-solving from someone who has already worked with similar projects or niches.

Low overhead costs

IT contractors typically work on a project or hourly basis, which means that you can avoid benefits such as paid leave whenever you hire IT contractors. Because of their low maintenance and high effectiveness, you can direct your expenses solely to the development process, concentrating on getting the work done and avoiding overhead expenses.

Free up your own resources

We understand that running a business is hard and you and your team have a lot on your plate and this overload can negatively affect your business. When you hire an IT contractor, you can free up your own and your internal team schedule by allowing them to focus on their core tasks and projects. In this way, you can avoid putting extra burden on your employees’ shoulders and allow them to concentrate on what they do well.

At the same time, IT contractors have low maintenance costs, which means that you can still get complex work done without spending a dime more than you have initially budgeted.

Fill the project-based need in experts

You can hire IT contractors for specific or temporary projects, thus relieving the extra workload from your own employees and having one worker concentrate on one thing at a time. An IT contractor then becomes an indispensable solution since you do not have to continue their employment after the project is done. In this way, you can finish short-term tasks or tasks requiring a particular skill faster and without overloading other workers.

3. Where to look for IT contractors?

How to find independent contractors for IT projects? In general, the process can be streamlined by using recruitment agencies, professional websites, freelance platforms, or, simply, resorting to referrals. If “hire a contractor for my business” is your most popular search request, the platforms described below will definitely be of great assistance.

Recruitment agencies

The fastest way to find an IT contractor professional and get the most out of their expertise is by resorting to a recruitment agency. By searching “hiring contractors near me”, you will probably find a bunch of online-based recruitment agencies whose job is to connect IT contractor specialists with companies requiring their services for short-term projects. Some of the most popular recruitment agencies for IT personnel are

• Code2Day
• Hays Technology
• TEKsystems
• Robert Half Technology
• FDM Group
• Optimum IT, and others

Professional websites (Clutch, etc)

If you want to find an IT contractor based on the experience and feedback of other businesses that have already worked with short-time employees in a similar format, platforms like Clutch are the answer.

Clutch is a professional website that connects businesses with service providers in various industries, such as IT, marketing, design, development, and consulting. The platform focuses on helping companies find the right partners and short-term employees by offering verified client reviews, rankings, and detailed profiles.

Freelance platforms: Upwork, Fiverr

Quite often, experienced and noteworthy IT contractors settle at freelance platforms like Upwork or Fiverr, which is not surprising.

At Upwork, for instance, you can either publish the details of the project to be completed in the form of a job posting and wait for interested IT specialists to contact you or explore their profiles yourself and contact the ones that suit your requirements best.

Referrals

If you don’t want to spend time on recruitment websites or freelance platforms, you can always find an IT contractor for hire through referrals. For instance, by reaching out to colleagues or business partners and inquiring about their experience working with short-time IT experts. In this way, the probability of finding a reliable specialist is higher because you will learn about the skills and possible weak points of each candidate first-hand.

4. What paperwork you need to prepare to hire an IT contractor

In order to hire contractors for IT projects, a certain amount of paperwork is needed. Even though you are not hiring an employee on a full-time basis, in order to do it properly, draft contracts, NDA agreements, remuneration data, and the scope of work to be done in the form of professional documentation. What paperwork do I need to hire an IT contractor? Find a detailed scope of the required and optional documents below.

Contractor Agreement / Contract

A contract agreement, or contract, for short, is the first document to be drafted whenever you hire an IT contractor to complete a project for you. In it, you must outline the terms of the working relationship, including the scope of work, payment terms, deadlines, and responsibilities of your temporary employee.

Contractor agreements might also include project specifics like the amount of work to be done and the expected timeframe, confidentiality clauses, remuneration, and contract termination conditions. In essence, a contractor agreement is the basic document sealing and confirming your cooperation with an IT contractor.

Non-Disclosure Agreement (NDA)

The next vital document both for your temporarily hired IT contractor and your business is a Non-Disclosure Agreement, also known as NDA. No matter the term of the contract, be it a year or a week, drafting and signing an NDA is crucial for protecting your company’s sensitive information that the contractor may have access to in the process of their work. Besides, an NDA specifies what information is considered confidential and outlines the contractor’s obligations to protect and not disclose it.

Invoice Template

Another important component of the paperwork is the invoice template. You can either draft it yourself or let the contractor do it for you but under your close supervision. The invoice template will then be used by the contractor to bill for their services. It must include the contractor’s details, a description of the work done, hours worked or milestones achieved, and the total amount of remuneration due.

Proof of Insurance

The next component of the documentation package is proof of insurance. It ensures that the contractor has liability insurance to cover potential issues that may arise from their work. This document can be a necessary requirement for certain projects.

Independent Contractor Classification

It might be necessary to add an independent contractor classification to ensure that the IT contractor you hire is classified correctly as an independent worker and not a full-time employee of the company. It also helps ensure compliance with labor laws and tax regulations of the country.

Project Brief / Scope of Work Document

A project brief is a document designed to specify the details of a project, its components, and associated tasks. It provides a clear outline of what is expected from the contractor and works as a reference throughout the duration of the project. After the work of the IT contractor is done, you can also use the project brief as a reference sheet allowing you to compare the amount and quality of the required work and the work done.

Payment Agreement

In addition to the remuneration clause of the contractor agreement, you can draft a payment agreement, which will serve as a separate document indicating how and when the contractor will be paid. The payment agreement includes remuneration terms, schedule, method of payment, and any other conditions for payment.

5. How much does it cost to hire an IT contractor?

The cost of hiring an IT contractor can vary significantly based on the country, the contractor’s seniority level, and the specific skill set required. According to Glassdoor, an IT contractor can make from $56K to $86K a year depending on experience and industry. The median yearly pay thus is $69K. Below is a general overview of what you might expect for IT contractor rates in different countries and at various seniority levels.

The highest pay rate, according to Indeed, is in the United States. Competitive rates are also in the United Kingdom (Totaljobs), Canada (Randstad), and Australia. In addition, European rates can be competitive as well, with countries like Germany and France offering around or over €200 for a senior position. Of course, you should not forget that the rates depend not only on the country but also on the seniority level. If your budget is limited and you can only afford to hire a junior-level IT contractor, then you mustn’t expect them to do a job that is too complex for their level of skill and professional experience.

You can find transparent daily, monthly, and yearly pricing for IT contractors’ work with the description of skills and activities at Code2day. Our platform comprehensively describes what is an IT contractor, their required abilities, hard skills, soft skills, and education.

Conclusion

When you hire IT contractors, it frees up your hands and enables rapid business scaling. Don’t miss the chance to collaborate with skilled professionals who can propel your projects forward and boost your business growth. With this 8-step guide — from analyzing your needs to choosing the right recruitment partner and effective onboarding — you can ensure a smooth and successful collaboration.

At Code2day, we understand how challenging it can be to find a trustworthy recruitment agency without firsthand experience. That’s why our clients pay just a $1,000 upfront fee, with the remaining balance split into two payments due 3 and 6 months post-hire. Schedule a call with our team, share your project requirements, and we’ll be happy to help.