Why should I use contract staff?

From lawyers and business people to writers, designers and yoga instructors – it seems that in today’s “part-time economy”, nearly everyone has branded themselves as a “consultant.”

With tighter budgets and unclear economic forecasts, many would dismiss the move towards contract staffing as a result of ongoing uncertainty, and its negative associations.  Both companies and contract workers, however, are instead finding increased flexibility – ideally benefitting both sides.

What exactly is a contractor?

In a conventional employer-employee relationship, a company will hire an individual directly, and that individual could theoretically spend the rest of their career working for that company.  But what happens when your organization has heavy demand for its product or services, is expanding into a new territory or has a major project come down the pipe?

Your company has to make a decision.  It can take the time (and expense) to search, interview and hire new employees on to your team – but then potentially have to lay them off when demand subsides, or needs change, again incurring expense.  The other option is to work with a recruiting partner.

The recruiting partner or project staffing company finds, screens and interviews the contract staff, sometimes also called “contingency staff” or “contractors”.  The contractor works on a contract through the recruiting partner – so your company isn’t responsible for their taxes or deductions.  Contract staff – be it a single contractor or an entire team – can meet your business’ changing needs for a set project duration, or as long as there is demand for their services.

Why should I use contract staffing?

Flexibility.  Uncertain or changing business needs often drive businesses to use contractors – but they benefit from the flexibility in the arrangement.  Companies are able to hire for the skills they need on specific projects, and only for the duration for the project.

Reduce risk.  Hiring is expensive; from advertising to screening, interviewing, background checks, hiring and onboarding – even an $8/hour employee can end up costing a company around $3,500 in turnover costs.  For contract staff, the recruiting company handles this. As a contractor’s continued success is based on their job performance, they tend to be more productive.  In some cases, the contract serves as an “extended interview”, where there is the possibility of permanent employment with the company after.

Hire experience.  Technical contractors in particular are hired for their experience in their area; for any technical contractor, the minimum experience is 3-5 years in their field.  Companies can hire for the specific skills they need to augment their team.  Contractors also bring a range of experience to the role: having worked on various job sites, they have been exposed to diverse technologies, business settings and ideas – someone on the inside who brings an outside perspective.

Partners with connections.  Recruiting partners are in the business of finding the top people; their business is dedicated to sourcing, screening and connecting with employees in the industry.  Beyond being a source of good resumes, recruiting companies now provide tracking tools to manage your workforce resource budget, be it a single contractor or a large team.  As sourcing, screening, interviewing and presenting contractors is their business; they save your company time and money.  Working closely with the company explains why half of staffing clients interviewed said that they viewed the recruiting companies that supplied contract staff as “partners”.

Financial.  Without a doubt, financial considerations weigh heavily in companies’ decisions to turn to contract staffing. Using contract staff may not just save the company money on hiring, but research has shown that companies who use recruitment services tend to do better overall, that flexibility in their labour demands were associated with better performance.  Companies can hire a skill set that they might not need full-time; they can devote resources to upgrading their in-house training for their overall goals – instead of playing “catch-up” for specific projects.

Hiring skills as needed gives flexibility to companies – and to contractors themselves.  In part two, we look at why workers might consider contract employment, and how to get started.

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