To be honest I don’t think it is the cost of benefits but the ability to fire people quickly without having to find other work that is appealing to companies. If some big grand idea flops and it’s 200 contractors, just don’t renew the contract. If it’s a lot of employees you have to move them around or something. Also, often contractor money is a different pile of money than regular hires/payroll. So people looking to empire build can do it more easily with contractors. Companies looking for lower costs will hire lower on the skill ladder or choose different cheaper locales, or drive off with more experience and higher salaries.