What’s all this fuss about anyways, on what kind of employment it is? Believe me, it IS a significant dilemma more and more organizations are facing in the last 5 years.
As an entrepreneur, more often than not, to remain competitive, you are constantly under pressure to achieve more with fewer resources.
The Covid-19 induced global panic has brought about an economic recession in many parts of the world. The decline is forcing business houses to relook at their operating model and seek newer avenues of cutting costs while maintaining profitability. Business leaders are witnessing a sea-change in the way people work and how business goals are met.
The “Future of Workforce Trends” by Gartner reported, “32% organizations are replacing full-time employees with contingent workers as a cost-saving measure”.
So, what is this contingent workforce, and what does it offer?
Simply put, it is a pool of skilled workers, who will work for your company for a limited period of time and complete a specific task or project – instead of a permanent employee. The terms of the job will be overseen by a legally binding contract. This will ensure that services are delivered as per standard and on time.
In the past, the contingency workforce was largely unstructured. With few checks in place, this quickly brought a bad reputation to the workforce and raised questions on their qualifications, skills and even the credibility of their deliverables. This has changed markedly with the advent of professional service providers in this area, who take the burden of pre-screening and act as the first filter, mitigating the hirer’s risk.
So, how do you benefit from this hiring model?
Contractual hiring gives unprecedented flexibility to your business – with respect to who you hire, how many you hire, and for how long! You can regulate your workforce selectively in a dedicated skill space for the desired period.
The sky is the limit when it comes to finding the perfect match for your business. The skillsets made available by the contract hiring model are vast. Furthermore, you can handpick not only the skillset but also the level of skill – ranging from novice to expert, based on your budget. All this, without the hassle of having to search, filter and hire using a cost-intensive in-house setup. Needless to say, the cost and time of acquisition are significantly reduced. Contract workers are safely accessible through agencies. They work with employers to understand, articulate and match the skill needs of the company and recommend the best-fitted workers.
Contract hiring equips your business to be better prepared at handling diversification, expansion or down-sizing in these volatile times. It allows you to respond to business needs, in real-time. Instead of hiring a full-time employee, you can hire as per work demands. This saves money and resources directly by not having to worry about bearing the salary expenses of a full-time time employee, irrespective of the skills being used or not.
In the normal course of their lifecycle, a lot of businesses go through peak and lean cycles. Staffing the structure with an optimum mix of full-time and contract workers balances the headcount cost in the long run.
How long the workforce will remain engaged on the project should be defined to business goals. The duration of the employment can be as flexible as the daily requirement of staff for construction projects to biannual contracting for complex skills like analytics/auditing. Few contract hires are also brought on board for a long term, like consultants working on business strategy or CXO’s turning around sick units.
There is a windfall advantage of hiring contract workers in the unskilled sector too. Since these resources are shared by various companies in the same industry, over a period of time they pick up best practices. This inherently improves their efficiency and productivity. Your business can tap into this without investing in specialized and expensive workshops.
The shifting workforce also brings a fresh perspective of looking at things. This outside-in lens has the potential to springboard your business to the next level when channelized appropriately.
Alongside, there are certain emerging and niche skill-set practitioners who actively seek only contract employment. They are not a fan of full-time employment due to time and mobility preferences. In such scenarios, hiring on contract the only way to go. Specialized skill employees also bring in rich experiences that add value to their hirer’s projects.
While the contracting model does increase your market presence and capability, don’t be in a hurry to conclude that contract hiring is the one-size-fits-all fix to your headcount needs. In certain situations, permanent employment will strategically score over temporary staffing.
Nevertheless, with the right footing, contract hiring offers a cost-effective, adaptable and active workforce solution to your business in the current economic times.
