I've been both an employee and a contractor for various companies.

I found that being a contractor is usually easier, the work hours are shorter, the pay is MUCH better and 'job' security is actually higher (which really surprised me - I've never been fired from a contract job).

From a company's point of view; contractors are not good value. Sure, it's better to hire independent contractors than to outsource everything to an outside company, but a contractor is nowhere near as productive as a full-time employee.

The kinds of companies which hire contractors instead of full-time staff are often interesting companies...