Contractors can be "released" whenever the employer wants whereas a full-time employee cannot be made redundant that easily. Please bear in mind that employees are never redundant, it's the job that's redundant.
To prove redundancy, one must not have employed anyone in the same or similar role within the previous 6 months or employ anyone for a year after, otherwise wrongful redundancy could be proved. Forward planning is not easy, especially in the business sector to which you are referring. If it is, please tell me whether I should do my IR next year to get a NS job or not.
When looking at someone's salary, the cost to the company will be much greater. Factor in 20 days holiday, 8 days bank holiday, let's say 10 days sick, pension, insurances, National Insurance at 12.8%, plus any other benefits. If you want to get rid of an employee and they have not been naughty do disciplinary action is not possible, then it's down to breaking the employment contract, sacking them and paying them off via a compromise agreement. This will normally involve solicitors and and employer would have to pay at at least a year's salary as compensation.
Contractors on the other hand (and I am one!!) need to charge more than a salary to ameliorate the employment risk that they are taking instead of the employer bearing that risk.
A business only exists to make a profit for its shareholders; anything else is incidental. If a business feels that staff welfare and a motivated workforce will help generate more profit, then that is the strategy that the company will adopt. If a business wants to run along ethical lines believing it will achieve a greater profit, then it will, otherwise it won't.
Cheers
Whirls