The last thing you have time to do is recruit the extra people needed to get you through. Combing through résumés and conducting interviews to find the right people is a project in its own right. Do you really need to make permanent hires? You could always get on the phone to an agency and have them send over contract workers. It's a tempting thought, but you have doubts. Can you trust the agency? Will contractors have the dedication the project warrants?

Table 1. Weigh All Factors.
Use this chart when deciding whether to make a position temporary or permanent. Click here.

Long-Term Needs
How long is the glut of work likely to last? Besides the obvious task of new development, you need to factor in deployment, debugging, and on-going maintenance. And since there is no magic formula to tell you how many people you're going to need, you have to make that call.

One of the problems with IT is that you don't need generally skilled staff, but people who know your existing systems. It's not like running a tax-prep business that takes on extra "advisers" in January and lays them off come April 16. You need to be sure that any people you bring on have equivalent experience or the ability to learn quickly.

Remember that allowing "learning time" is a big investment in the new hire by your company, and you'll want to ensure the best return. When it comes to permanent employees, it's fair to take a hit training them, but with short-term contract staff you want them to be effective from day one, if at all possible.

If your aim is to build a killer development team, you need employees who are fully committed to your company. You don't want your invested expertise running off after a few months—potentially to your competitors. I'm not suggesting that contract staff will spill your secret beans; but you don't want to pay to train someone who will end up working against you. Headhunters are always on the lookout for "movable talent"—if they can profit by taking a short-term contractor currently working for you and placing them in a higher-paying job, they will.

Risk Analysis
Of course, the same headhunter could poach one of your key full-timers as well, so the risk is not entirely in the contract area. With this in mind, ask yourself how critical to your business the systems under development are. Your company's continued prosperity is unlikely to depend on some VBA code that speeds up data entry in Microsoft Office, but loss of service on your EDI back end could lead to a loss of millions of dollars in revenue.

Which of these projects calls for contract staff? While there is no apparent risk in hiring someone for a couple of days to charm up the macros for the Word users, would you make a contractor responsible for assuring your company's income? Strangely, the answer might well be yes, since reliability is such an esoteric area that you are unlikely to need a full-time expert in that capacity.

The biggest risk you run in using contract staff is that they won't know your business. Clearly making your e-commerce server run at 99% reliability is pretty much the same task as for someone else's server. The knowledge comes from vendors and research, not your business practices. But when it comes to analyzing and implementing those very practices, you are most likely going to want to retain permanent staff.

One way of looking at this is to consider outside and inside knowledge. Consultants are great for handling the outside stuff—after all, they're not doing their research on your time. They bring a new, and hopefully fresh, perspective on what you're doing. But that's not a big help if a new recruit needs an intimate, inside understanding of how your company works. In this case you're better off investing in permanent staff.

Trail Mix
Difficult-to-come-by expertise is a perfect reason to use a hired gun for a specific job. This is typically the case in Web development shops, where often only the most senior staff members are permanent. Jobs are filled as required, and teams dispersed when they're over. The most valuable asset of any Web house becomes its talent directory. You may pay a small fortune for their time, but they'll bring a wealth of experience to the project that you couldn't get otherwise.

As the range of IT skills needed in every team becomes increasingly diverse, expect to see this "little black book" approach spread. This is great if you need some nice graphics or a good frame layout. However, it can be a potentially dangerous approach if you are using these people to implement business-critical functions. That's not to say that you can't use contractors to build complex, data-driven sites—many businesses do. But you need to agree up front about development documentation and support arrangements. In such a case you're probably better off outsourcing the whole project, and only maintaining a watchful management eye.

Web skills such as graphic design are not the only ones that are often provided on a temporary basis. Several other professions are routinely hired on an as-needed basis. Technical writers often work on a project basis, and they can be found through specialized agencies. Software testing, too, is often staffed with temps who move from test phase to test phase like migrant farm workers moving from one harvest to the next.

A rule of thumb is that you can find talent more readily than management. Management provides the continuity and long-term view while worker bees can come and go. I know a company that went as far as to lay off all their full-time technical writers, retaining only the documentation management. They maintained that while it was easy to hire writers when they needed them, good managers were difficult to find. I wasn't surprised to learn that it was the documentation group managers themselves that came to that conclusion.

The good news is that those writers, or at least the ones I know of, have little problem finding a variety of interesting work. There seems to be no shortage of opportunities for contract workers in the IT business, and no shortage of agencies to fill them.

A last word on training—don't neglect opportunities to "grow" internal talent. If one of your team is a whiz in VB, don't over look her for a new project that uses Java. You could retrain her for the new position and hire someone to take over her old job. It's a win-win situation; you show commitment to career development, and she brings insider knowledge to the project.

Another motive for employing someone on a contract basis is quite simply to try them out. Normally, if you want to terminate someone who was hired as a permanent employee, you have only a short evaluation period in which to do it. After that, it can become a lengthy process that requires you to document their performance. That can be a very expensive exercise in time and money —for both parties.

Some managers have developed a try-before-you-buy approach to hiring by taking people on for short contracts and then converting them to permanent employees if all works out on both sides. This tactic is often used for people being considered for senior management roles; a candidate may work as a consultant for a couple of months before becoming VP of whatever. It can be a good arrangement, except that the candidate must be willing to leave any previous employment to "roll the dice" on a lucrative permanent position.

And what if your temporary worker prefers to remain just that? Many people enjoy the freedom and benefits of being a contractor and don't want to convert to permanent status. The data center for one of my local banks is staffed almost entirely by contractors. Some of them have been there for 10 years—at full consultancy rates. That's an expensive proposition for the bank, by any account.

The value proposition of contracting can be summed up in one word: benefits. Although you may pay a temp worker more than a permanent employee, you won't be burdened by the costs of their health insurance, 401(k), and the like. Each financial service you provide requires an initial setup investment as well as a recurring cost, and that can be prohibitive for short-term contracts. It may be cheaper in the short term to simply pay more cash for someone you need only occasionally; they can sort out their own insurance.