Cruising the sea of work world, waves of new trends and changes are common. Hiring managers and talent acquisition specialists are accustomed to the seismic shifts in the concept of employment and manpower strategies adopted by companies.
The hiring of contract employees has been utilised as a Band-Aid to this unprecedented global recession due to the onset of the Covid-19 virus. While companies are undergoing restructuring and reducing headcount, they are also concurrently turning to temporary workers to fulfil their manpower needs while cutting down on welfare and training costs.
The hiring of permanent staff may have its advantages and which employment arrangement to subscribe to depends greatly on the budget and requirements of the company.
Read on to understand why businesses are recalibrating their manpower strategies and bringing onboard more contract employees.
The hiring of contract employees would mean these employees are employed on a pre-determined duration. Hence, under such an arrangement, companies are not obligated to provide more than the basic remunerations and welfare. In addition, these workers also specialise in their field of work. It is not a common practice amongst firms to send contract employees for training and upskilling courses. These would translate to cost savings for employers.
Some organisations elicit the help of Employment Agencies for contract staffing services. With the involvement of these experts, they typically offer a replacement period of 3-6 months. In other words, should companies decided to let go of disappointing new hires during the warranty period, employment agencies will source for new replacement candidates at no cost. This ensures that companies are able to save up on the cost involved in the re-hiring of candidates.
One main advantage of hiring contract employees is the flexibility to only hire when the company is facing manpower shortages. It is common for certain industries to experience seasonal or cyclical demand causing fluctuation in their staffing needs. By hiring permanent workers, companies could be paying monthly salaries to these employees without having sufficient tasks for them to work on.
On the other hand, organisations can hire contract employees only for the period of the project or when they faced a sudden spike in demand. This allows companies to utilize their resources more effectively.
Contract employees also provide firms with a quick and efficient solution to combat the skills gap in the company. For instance, companies may receive a job request from their client that requires out-of-house specialised skills which the current employees do not possess. By hiring temporary workers, it allows companies to gain access to the additional brainpower and the specialised skills they need to get the job done, and also the flexibility to scale back once it has been completed.
Contract employees are proven to have extensive experience in the field due to the fact that they have taken up multiple roles throughout their careers. These employees can bring new skills, ideas, and knowledge to the table during interactions and meetings with current employees. Such knowledge transfer is certainly value-adding to the organisation as it facilitates decision-making capabilities, cultivate a learning culture, and stimulate innovation and growth.
Some companies might be struggling with a lack of qualified individuals, especially in this candidate-driven market. By lifting off the filter for permanent positions, it opens up a wider array of possible employees for companies to choose from. This increases the chance of identifying highly-qualified candidates that are best suited for the roles.
With the contract workforce, it provides the much-needed flexibility that companies require to build and sustain a future-ready talent management strategy. In addition, these professional contract employees also bring along their knowledge, experience, and skills set to the business. They facilitate knowledge transfer amongst existing employees and drive innovation.
It is recommended for businesses to adopt a blended workforce – permanent and contract employees, to build a highly-skilled, agile and flexible workforce that is said to be necessary to remain competitive in today’s fast-paced and competitive environment.
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