Contractors were once only a mainstay in the workforce of the construction industry. Such workers were brought in on a contract to do the building and other construction work, hence the term contractor. As the scope of work changed so did the role of contractors, who have now extended far beyond the world of construction with many now being involved in IT.
Anyone who has particular skills that can be of use to a company can hire him or herself, and their skills, out on a contract for a particular length of time. This can be a win-win situation for both the contractor and the company who hired him/her. The contractor benefits because as he is his own boss and he can pick and choose the type of work he wants to do. Also contractors tend to be better paid than full-time staff members doing comparable work. The company benefits because it does not have the same obligations towards the contractor that it has towards a full time staff member, such as having to meet sickness or holiday pay.