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Flexible and Functional: Why the Thriving Market for Contract Talent is Worth Tapping Into

Posted on: August 17, 2017

Categories: Featured | Hiring

By Barry Pronier, Managing Director

Amid an employment market that’s keeping hiring managers and recruiters as busy as bees, there’s new buzz about the continued growth of contract labor as a means to fill the talent gap.  A recently released report by the US Bureau of Labor Statistics showed year-over-year growth in temporary jobs was 4.24%, the third-largest year-over-year growth rate since June 2015.  The US added over 14,000 temp roles in the month of July alone, and this growth doesn’t appear to be a short-lived anomaly.  This trend is consistent with the assessment of CareerBuilder’s 2017 Annual Job Forecast, which predicted the demand for contract labor would be strong as employers recognize the advantages of the flexibility contract labor brings to their staffing strategies.  In that piece, 51% of employers surveyed indicated plans to hire temporary/contract workers this year – with that number being even higher in industries like Technology (75%), Manufacturing (59%) and Healthcare (56%).  The study also extended the forecast out through 2020 and predicted that a total of nearly 200,000 new temp roles will be created, which accounts for a robust 7% growth.  Some of the roles projected to grow the fastest during the three-year span include the following:

Occupation

# Temp Roles (2017)

# Temp Roles (2020)

% Change

Software developers, applications

18,157

19,443

7

Accountants, auditors

10,353

11,077

7

HR specialists

48,076

51,054

6

Considering Charlotte’s hyper-growth and strong economy, one can extrapolate and see that the market for contract labor in the region, already hot, will be getting even hotter.  Employers who incorporate contract labor as a part of their overall talent acquisition strategy and deploy it effectively will realize the advantages of doing so.  But, aside from the previously mentioned flexibility, what are the major benefits of a workforce that includes a mix of highly skilled contractors?

Nimble Adjustment to Business Needs

Ask anyone in the accounting world about “busy season” and they’ll most likely relay a horror story about long hours, huge workloads and stress.  That’s just one example, but all industries experience peaks and valleys in their business cycle. Contract labor is one way to manage the peaks without overstaffing for the long haul.  Adding the right talent at the right times helps manage the peaks and keeps a company’s full-time staff productive and fresh. 

A Trial Run

Much has been written about the high cost of turnover.  In a recent Huffington Post article, Deloitte’s Josh Bersin estimates the cost of losing an employee can range from tens of thousands of dollars and up to 2 times the lost employee’s annual salary.  Costs to consider include hiring, onboarding, training, ramp up time, loss of engagement due to turnover, potentially increased error rates and overall cultural impacts.  Simply put, hiring the wrong person is expensive.  By bringing talent in on a contract basis, employers have the opportunity to make sure the candidate is a fit for their organization prior to making a long-term investment.  This benefit is reciprocal as well, allowing the contractor to get a feel for the company and the role before deciding if there’s a match between their desires and what the organization has to offer.

Addressing a Skills Gap

For companies to stay on the cutting-edge, or even just up-to-date, they must evolve.  A major part of this evolution entails bringing in talent with the precise skills and experience the business needs at a given time.  For example, a company implementing a new system or technology could engage a contractor who has previous experience with it to plan the adoption, implement it and train full-time staff.  By doing this, the company remains productive during a period of change, limits downtime and doesn’t have to add additional headcount for a non-recurring initiative.  It’s become the norm for employers to utilize contractors with creative, technology, financial and even executive and management skills on a just-in-time, as-needed basis.

Prepared for Short and Long Term Changes in Staff

Charles Kettering once said “The world hates change, yet it is the only thing that has brought progress.”  Nowhere is this more accurate than with regards to human resource management.  On a daily basis, HR professionals deal with employee life events such as family leave, vacations and illnesses, to name a few.  By including contract labor in their overall staffing strategy, companies are well equipped to take these short-term changes in stride and keep business moving.  With more permanent staffing changes, such as relocations, reassignments and even terminations, contractors can often step in and bridge the gap between the time the announcement is made and the replacement is found, which, according to SHRM presently takes 42 days.

Potential Cost Savings

Employers should be able to realize cost savings by adding contract labor into the mix.  Why?  Because in most cases, the employer avoids payroll taxes, unemployment insurance, workers’ compensation, disability, pensions, sick leave, health insurance and vacation time (although recent healthcare changes have impacted some of the health insurance requirements).  Additionally, since the contractor will only be working for the duration of the project, they are a variable cost that will go away after the project has been completed.

These are just a few of the reasons why contract labor can help employers develop a more functional staffing philosophy – but they certainly aren’t the only ones.  Given the continued forecast for growth in temporary labor, it’s certainly a tool that sharp hiring managers and business leaders should consider to address their talent requirements.

 


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