Actually, contractors cost far LESS than real soldiers. American mercenaries get only about $150,000 per year. To kit one out for battle probably only costs about $60,000 (M16, armored Ford F-250 pickup, boots/radios/mags/etc.)
After six years of use, they can be thrown on the trash heap and forgotten.
State soldiers earn far less per year in base salary, but can lay claim to EXPENSIVE long-term benefits such as government health care, retirement pensions, housing, survivor insurance, and more.
After 2-10 years of usefulness, you are still stuck with them.
Al Qaeda mercenaries are even better. They are like Chinese peasants stamping out high-profit iPhones. Salary about $18,000 per year. Cheap kit of AK-47's, Nike trainers, the occasional .50 cal., an old Toyota, and hand-held crap radios. Total cost probably only about $5,000 each to field.
The BEST aspect of mercenaries is avoidance of lawsuits when they murder people, and being able to deny that they are even work for you.