5 reasons why hiring contractors are your next talent solution
More than three-quarters of human capital leaders are making contingent staff – like contractors -- a key part of their overall workforce strategy.
So why are contract professionals such a critical part of blue-chip organisations' talent solutions?
Knowing five answers to that -- if you’re a contractor -- could provide another reason to give a deliberating decision-maker to hire you, or a bit of handy leverage to explain why you have the edge over perm, writes Adrian Smith, senior director of operations at Randstad UK.
1. Taking on contractors is inherently less risky
In business, few mistakes are more costly than hiring the wrong person. Those costs compound by the day, and impact every aspect of company performance, at a time when human innovation is critical to business success.
By contrast, the right hire will deliver a substantial return on this initial investment. And the wrong hire will cause further loss.
Once hired, bad employees can drive down productivity, hurt morale, and even drive away clients and good employees.
The problem is that hiring managers can feel rushed to fill a position. Organisations hire new employees in times of need, so there is always internal pressure to get it done quickly — staff are overextended, for example; or an employee has left abruptly, leaving a critical role unfilled.
The hiring manager can be too hasty in their hiring decisions; shrug off aspiring employees’ shortcomings, or overlook red flags. And then the department, and even the organisation at large winds up in trouble.
It’s natural that this happens. But the downsides of hiring the wrong contractor are, perhaps, less severe. And, on the flip side, engagers can trial contingent workers as potential permanent hires.
Furthermore, while there is currently a massive talent shortage, the resilience of the economy is not guaranteed. Getting rid of a permanent hire 14 months down the line isn’t as painful as cutting back on your contractors.
2. Contractors can be taken on faster than permanent hires
But not just faster -- less expensively too!
A lot of time and resources go into hiring permanent talent. Achieving maximum efficiency in human capital cost will always be a key goal for most HR departments, and engaging with the contingent talent market when you have an immediate skills-need is a good way to achieve it.
Hiring a permanent employee is a considerable financial commitment, with costs like advertising the role, onboarding, training, salary and benefits to take into account. Companies also lose money and productivity while positions are left unfilled. Bringing in flexible workers, by contrast, can help organisations make optimum use of their HR budget by ensuring only the skills and services required, when required, are being paid for. It’s ‘lean’ recruitment if you will, no fat.
3. Hiring contractors can enlarge your pool of talent
Accessing top talent among workers that prefer to have a flexible schedule (parents and students for example) may well result in better overall hiring decisions in this talent-scarce market.
Workers themselves are increasingly recognising the professional, financial and lifestyle benefits that can be gained from freelancing, contracting and ‘gig economy’ working. Covid turned more people onto this way of working and some candidates now have a number of days per week that they want to be entirely remote for. This ever-growing pool of freelance, interim and contingent talent available in the flexible labour market can help business access skills and experience that are difficult to source through traditional hiring. As contractors are also networking-types, often part of their own informal or formal hub of like-minded professionals, your next niche technologists might even be found or facilitated by your last niche technologist!
4. Changing your organisational design to incorporate contractors can make outfits more agile
Organisations can become more agile adopting an operating model that enables HR to flex, based on dynamic business needs.
It’s becoming increasingly important for HR to take an agile, adaptable approach to the unique challenges and opportunities businesses are currently facing. Incorporating contingent talent into your workforce can make your teams more dynamic and better able to succeed in a rapidly changing environment. More than one in three businesses using gig economy workers say they do so to improve their agility (36%).
5. Contractors can bridge the gap while getting that project over the line
This fifth reason is simple, but no less important. Sometimes, an organisation will need to fill a temporary talent gap with a immediately available but short-term contractor - such as when a permanent employee is on maternity leave. Contractors can prove particularly important if you have even shorter-term requirements, such as if you need specialist skills to complete a one-off project because an internal developer is ill, or if you need additional bodies to meet a seasonal spike in demand, for example.
This reason or the other four are invariably why 75% of corporate finance leaders see contractors, freelancers, and temporary specialists as an important part of their company’s recruitment strategy. However your square it, contractors are a crucial part of the tech workforce, and these five reasons only scratch the surface of why non-permanent hires are increasingly the way to recruit.