If you have specific, defined tasks, it's better to get a contractor. For example, for my current project, I hired a sysadmin for about a week to set up a new infrastructure, configuring puppet and so on. Sure, I could have done it myself, but that would have taken a lot of time and probably wouldn't have been done as well (I'm more dev than admin).
Contractors can work out well, as long as they are treated like contractors. I've seen (and personally experienced) too many situations where employers are simply looking to hire an employee (while calling them a "contractor"), without having to provide benefits or have them eligible for unemployment, etc. So they'll bring in a contractor, ask them to be on-site, try to give them set hours, try to supervise them, and so on. That's shady, and at least in Canada, won't fly (or, it isn't supposed to).
If you have specific, defined tasks, it's better to get a contractor. For example, for my current project, I hired a sysadmin for about a week to set up a new infrastructure, configuring puppet and so on. Sure, I could have done it myself, but that would have taken a lot of time and probably wouldn't have been done as well (I'm more dev than admin).