The Case for Hiring Contractors

Simply Hired Staff
12 Aug 2014 0 Comment

“With the number of temporary workers up 50% since the recession ended four years ago and the number of contract workers at an all-time high, freelance work is fast becoming a mainstay in the 21st century economy.

The rise in temporary employment often represents a mutual benefit between businesses’ need to keep costs down and workers’ lifestyle choices. At the same time that businesses are pleased to avoid health care and retirement costs, some workers are willing to forego them in favor of lifestyle flexibility.

This means if you’re not working with contract staff yet, you might be doing so soon. So how do you know when to bring on temporary staff, and what do you need to look for?

Short-Term and Specialized Help 

“Hiring contractors is a better choice for short-term projects,” said Avni Shah, lead recruiter for Simply Hired. “Hiring a permanent employee for a short project is not cost-effective as you have to pay a base salary and/or other variable compensation plus benefits.”

Shandy Dunn, vice president of High Tech Connect, a consulting agency for marketing talent, lists specific instances in which contractors are ideal. “Companies bring on consultants for both strategic and tactical spikes in output like rebranding, sales kick-offs, website redesign and corporate re-orgs.”

Dunn also mentioned the cost-effectiveness of contractors for these short-term efforts. “It makes more sense to spend more per-hour and less time on training and benefits by bringing in experts who can turn around projects quickly,” she said.

‘Try Before You Buy’

Another reason companies choose to invest in contract help is because of the risks associated with finding the right employee. It’s easier to let a contractor go than a full-time employee. “They might have missed the mark with the previous hire,” Dunn said. Hiring a contract worker helps employers gauge whether someone is a better fit with the current team.

“You want to see how that person engages with the team and how they perform in the assignment on hand,” Shah said. In engineering, for example, there’s an acute learning curve. “A lot of companies want to see if the software engineer that they put on contract can learn their specific technologies,” Shah said.

Finding the Right (Temporary) Fit

Not everyone wants a contract role or is well suited to one.

“You want people who are flexible and comfortable moving in and out of different environments. A contractor needs to have the right temperament,” Dunn said.

The contractor who is brought on as an expert must start applying their expertise almost immediately with very little training. It’s also a lifestyle choice that may or may not be suited to a person’s life stage. “It’s up to the recruiter to really sell the opportunity/experience,” said Shah. “If they’re looking for long-term stability, they won’t be interested in a temp role.”

Chelsea Gschwend, a former contractor with NetApp, enjoyed contracting for the year-and-a-half that she did so. “I was bound by working eight hours a day,” she said, “unlike being on salary where days may last longer than others. I liked the independence it offered.”

The flexibility worked for her lifestyle, and she didn’t mind not getting paid for sick days or vacations, but eventually she had to seek a full-time role. “Being a contractor meant that it was harder for my husband and I to buy a house,” she said. “My income could not be counted even though we made enough to afford a decent home in the Bay Area. No one would give us a loan because my income came with an end date.”

Dunn takes the view that contracting works best at different life stages. “Over the years I’ve seen people shift back and forth between contracting and permanent roles,” she said. Contracting may or may not be a fit if someone is buying a house, starting a family or becoming an empty-nester. The best contractors will have the right temperament, expertise and interest in the contracting lifestyle.

Establishing Employee Event Participation Guidelines

Should temporary employees participate in all-hands and team building events? “It varies from company to company,” said Shah. Dunn agrees, and cautions, “There’s the co-employment issue. You don’t want to set yourself up for a lawsuit.” She said engagements that involve corporate restructuring, executive strategy and rebranding are situations in which a contractor would be expected to attend company-wide meetings. “It’s not necessary for every contractor,” Dunn said. When temporary employees are being paid by the hour, it makes sense to for them to spend their time in a way that maximizes productivity.

The expertise of enthusiastic contractors can reduce the risk of bad hires while providing immediate help. Whether your company has a short-term initiative or is looking to cut costs, expanding your temporary workforce is worth considering. You can post a temporary or permanent job on Simply Hired today.

This article is part of a series on how to adapt and thrive in this new era of changing careers. To receive articles like this by email, sign up for Simply Hired’s Monthly Newsletter and Feature Articles.

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