What causes a company to choose contractors over staff employees?

Business objectives and shortages of staff candidates.

They are paid to deliver at a set rate st a specific date

Cost associated with Benefits. Also, could be short term employment.

Ability to try before buying

They can end a contract at any time and they don't need to offer health insurance.

Some times skill set sometimes work load sometimes cost from my experience.

Long term need for the consultant is certain.

Long term commitment vs. cost.

Planning for something big but over reaching and not getting to the company's goal. Or losing a contract from underperformance.

It’s less expensive to not have to provide benefits. But this can lead to misclassification of workers as contractors, rather than employees. So it is important to know, understand and apply the IRS criteria which distinguishes the worker type and keep documentation.

Saving since benefits are not paid. Also the project timeline would dictate whether a staff is needed for a short time.

Could be that familiarity breeds contempt. Guilty by association could be another. The idea of objectivity/better work product on the part of contractors which may or may not be true. Contractors may not see the work being done as monotonous as opposed to being done in house & too familiar w/ the work environment. Management may have a hand on where these contractors are coming from (they've had previous work relationships). A contractor might have a homogenous team that is easier to lead and govern especially if the entire team speaks one language (while in house staff is more diverse with varying degrees of work ethic, values which will lead to co-workers blaming each other). Staff employees are too comfortable with the illusion of permanence, while contractors know their employment depends on the temporary contract, and are somewhat pressured to perform better or they're simply let go/removed, therefore benefiting management/client w/ a better product.

They save money and don't have the headache of having to deal with staffing.

the way they are budgeted and a quick resource need.

In my experience, this decision is driven by the perception that contract employees are a cheap source of infinite work who can be let go without cause at any time. Sometimes companies are not given a sufficient budget to hire staff employees, and so contractors are used and then intentionally set up to fail, so the exercise can be used as leverage for future hiring conversations.

Overall cost and flexibility. Companies can save money on contractors by not paying benefits. Contractors are dispensable and can be paid a lower rate than a regular employee. Contractors can cover short term needs and wont affect fiscal budgets as a regular employee.