Contract staffing offers an excellent opportunity to meet critical project goals, control costs, increase productivity, and manage risk. While the decision to use contingent staff is never a simple decision, the benefits can be quite substantial. By collaborating with a professional technical firm, you give yourself an easier and faster way to locate technical talent and your business gains a competitive edge in the marketplace! Despite these benefits, only 20 percent of businesses use contract staff. Why is that? Consider the following frequently asked questions.
Iíve heard that contract workers earn half again as much as our employees. Why should I hire someone who's more expensive?
Look behind those numbers, and you'll find a few faulty assumptions. Remember, an employee's hourly rate is only a fraction of his total expense. After adding in payroll taxes, benefits, and administrative costs (which typically range from 30% to 50% of salary), the hourly rate is almost identical.
Next, let us look at the expenses involved in hiring a direct employee. First are the recruiting costs, (advertising, assessment testing, and candidate travel). Now let us add to that the productivity lost as project leaders come off assignments to manage hiring activities. Finally, consider extraordinary expenses such as the signing bonuses frequently associated with high skill positions. With contractors, the hourly fee is inclusive. When the project is completed, so is the assignment. There are no termination costs or other extraordinary expenses. The greatest value of contract staffing is often the time savings. Time is your most precious asset. Think of the time and effort it takes to recruit, screen, test, interview, and hire personnel. With contracting, we handle these activities, while your team stays focused on project work. Contractors can also reduce project development time. Hiring a contractor is faster than hiring a direct employee. The contractor not only has experience in your industry but also has, no doubt, solved the same issue at other companies. The time you save increases the probability of meeting your project schedules. In industries where product life cycles are measured in months or even weeks, reducing project time is critical.
Contractors are not my employees, so how can they get on the same page with my direct staff?
Effective leadership is about guiding and motivating people to produce results. Whether those people are direct employees or contract, you are faced with the same challenge but since contractors and direct employees are likely to be motivated by different needs and wants, it's often easier to lead a blended team and satisfy the varying needs of both.
To lead your team, start by practicing open communication. Clearly delineate the roles and value contractors and direct staff bring to the project. Direct employees possess specific company knowledge, while contractors provide specialized skills. Our people are trained to cultivate partnerships with your direct staff. Such integration fosters personal rapport and encourages team members to learn from one another.
Next, develop management standards. In part, that means making sure financial treatment is equitable. Consider paying direct employees for overtime. Offer bonuses to everyone when tight deadlines are met. Ensure that every member of the project team--contract and direct--has defined and measurable goals. In the case of contract employees, be sure to work with your contracting partner to set goals, provide rewards, and hold contractors accountable for results.
It seems like contract employees are motivated primarily by money. Won't they leave my project when a more lucrative opportunity comes along?
For most contract employees, their primary motivation is not money--it's a combination of learning new technologies and having job flexibility. They like the independence and challenge that comes from varied assignments. Just as important, they are able to work as little or as much as they want.
To enjoy this level of flexibility, they have to be easily employable and that means they have to be reliable. Competent contract employees recognize this fact, so they make sure their customers are satisfied with their work. Results from a recent survey show that 94% of those using contract staff believe that their work is better than average.
What's to prevent a contract employee from using our acquired intellectual property for the benefit of another business--maybe even my competitor?
The technical staffing industry does not ignore intellectual property rights. Our firm requires contract employees to sign a confidentiality agreement--a legal assurance that they will not disclose your enterpriseís information to anyone. Contractors working on sensitive projects can even be required to obtain security clearances.
On a practical level, however, the likelihood of a contract employee "stealing" your intellectual property is quite slim. Usually, contingent staff are placed on assignment because they provide needed technical expertise. When the project is finished, they leave. They don't have time to study project phases and formulate "big picture" implications--even if they wanted to!
In the final analysis, your company will more probably take away more "intellectual property" from the contract employees than the contractor will get from you. Use their knowledge to its fullest to improve your projects and enhance your staff's skills.
Contract employees aren't my employees, so who manages them? To whom--if anyone--do they listen?
While it is true that the contract employees we send you receive their paycheck from us, when they are on assignment at your facilities, they are under your direction. They can and should be included in all project team meetings and process improvement activities.
When distributing important project information, don't forget your contractors. As we said earlier, you should determine in advance, with your contracting firm, measurable goals for contract employees. Then, make sure they deliver. By managing their progress, contract workers will feel part of the team, and you are in full control of your project goals.
Some responsibilities are still best left solely to your contracting partner, including pay rate discussions; end of assignment notification, and in rare instances, disciplinary action. A good rule of thumb? When in doubt, consult with us, we will be happy to help you decide who should handle the question and, at your direction, we can handle any contract staffing issue you desire.