Within the USA, I like hiring people via the employee route. I'm paranoid that one or more contractors will do something like not pay their payroll, file for unemployment, or simply claim they should have been an employee all along. I'll consider contract arrangements for people that are clearly contractors with their own business, people outside the USA, and short term engagements where someone specifically asks in writing to be a contractor. Anyone who doesn't otherwise say so is going to be an employee. I consider the certain overhead of having employees to be insurance against the uncertain overhead of are-my-people-employees-or-contractors shenanigans.