The End of Employees: Switching to Contract Talent

Building the right workforce has become more complicated than ever. Companies are increasing their reliance on temporary and contract talent to bring the right skills and expertise to their teams quickly. This smart move is a quicker option than permanent recruitment, reduces risk, meets resourcing demands of temporary strategic projects, and accelerates growth.

Today companies are trying to hire fewer employees in favour of contract talent. If you are new to considering alternative employment types, read on to learn why contract talent is on the rise. 83% of companies are now relying on contract roles and this aligns with the workforce trends where 50% of professionals are opting for non-permanent work. Since people are a company’s true competitive advantage, creating a balanced employment model will appeal to all of the best talent.

Contract work is a win-win.

Contract work means companies get the people they need when they need them. Plus it keeps the official headcount low. In fact, it’s a hiring strategy for some companies. Take Google’s parent company Alphabet, ranked by Fortune magazine as the best place to work for seven out of the last ten years. They prioritise hiring contractors to fill gaps in specialised expertise that they don’t currently have or want to build out or in areas where they need temporary support to support holidays or spikes in work. With roughly equal numbers of contract workers and full-time employees, they’ve found their perfect workforce recipe.

Here’s why companies prefer contract talent as an alternative to permanent employees.

1. Hire in-demand skills in a tight labour market.

   Highly specialised talent is hard to find. After honing their skills for years, experts often prefer contract assignments linked to specific strategic projects. When up against large companies with brand power or big budgets, hiring contract talent especially in technical industries is a growing trend.
   
   

2. Trim HR costs or shorten hiring cyclces.

   Contract talent is a quick hire. In fact, it can be as quick as a matter of days from job post creation to a new team member sitting in your office. Without worries about long-term commitments, hiring can focus on essential technical skills and simplify the hiring process, which enables companies to move quickly to capture skilled talent with the intense competition.
   
   

3. Flexibility to scale with workloads.

   Companies have become shy of commitment with the global uncertainty, yet need a workforce to deliver projects. This accelerates the demand for contract workers who can be hired for fixed periods of time without further obligation.
   
   

4. Lower long-term labour cost.

   The cost of contracting has a positive impact on the bottom line as 32% of organisations are replacing full-time employees with contract workers as a cost-saving measure. Contractors most often do not qualify for the same benefits as permanent employees. Also since they come out of a different budget, it’s often easier to bring on a contractor than a permanent hire.
   
   

5. Make an immediate impact.

   The fixed term nature of a contract role means hiring experts who can hit the ground running from day one. Although contractors can cost a bit more on an hourly basis, they are equipped with the necessary skills to make an impact immediately, which accelerates strategic projects and productivity.

Companies are changing their perspectives on flexible workforces and embracing the contract work model. As the ratio of our contract workforce grows, we’ll see spill over effects in average employee tenure and attitudes towards workplace variety becoming more prevalent on a CV. In fact, some people are predicting that spending too long with any one employer could be considered a limiting disadvantage when it comes to showcasing adapatbility and flexibility. Either way it’s clear that permanent employment is not the only option and no longer the unanimously preferred one for both workers and organisations alike.