With businesses aiming to attract the best talent, many are now relying on contingent workers, rather than hiring in-house staff.
Generally known as independent contractors, consultants or freelancers, contingent workers tend to work on a per-project basis. Whilst many of these workers do work on a retainer for certain companies, most are free to move from project to project.
Estimated to account for 20% of the workforce in 2015, the number of contingent workers is set to rise. By the end of 2017, Fieldglass predicts that 25% of workers will be independent contractors, rather than employees. With an additional 34% of workers in a ‘grey area’, this will leave just 41% of workers as traditional employees. So, what’s prompted the rise in contingent workers and is it really best for businesses?
In order to enhance performance, companies need to build an effective workforce and this means hiring candidates with the right skill-set. However, the nature of the work landscape and the rise in technology has left businesses with differing needs.
Rather than requiring permanent staff to perform routine tasks, many businesses need temporary assistance for specific projects. This is, perhaps, most applicable to the IT industry and the technological needs of businesses. Whilst large, multi-national companies may require in-house IT staff, most companies don’t need numerous IT experts on their payroll. For businesses who choose to retain some IT staff, they may need additional personnel from time-to-time.
It goes without saying that businesses want to attract reputable, endorsed candidates. In order to do this, it’s essential for employers to offer a challenging and rewarding working environment. Whilst a company may be able to offer an IT candidate a temporary contract for new software development, they may not have an on-going need for development or IT assistance. If they were to attempt to hire permanent staff, the best candidates may overlook the position due to this. By hiring a contingent worker, however, they can ensure that the business needs are met and that their staff are fully satisfied.
Whilst many companies are keen to use independent contractors for new projects, some show concern over the ongoing management of a project. Hiring a freelance software developer may enable businesses to launch new software, for example, but a business may lack the in-house capabilities to manage the software on an ongoing basis.
If problems arise, it’s essential that they are resolved quickly but this doesn’t necessarily mean that companies require an in-house IT team. Indeed, it would be counterproductive to pay staff to be on-hand in case a problem should arise.
Fortunately, the nature of hiring outsourced workers means this is not a barrier to business success. Some companies may prefer to use the same contractor on a repeated basis, paying them hourly or on a per-project basis.
Alternatively, businesses can hire a range of different workers, should they require them. With so many differing programming languages and software structures, the use of contingent workers enables companies to attract experts in niche areas, ensuring that projects can be completed quickly and efficiently.
Although some roles still require an on-site presence, many job roles can now be carried out remotely. With location no longer a barrier for businesses, companies are free able to hire staff from all over Europe and the rest of the world, without the financing costly relocation packages.
With most IT roles being carried out remotely, it is, perhaps, the industry most suited to independent contractors and expert freelancers.
In fact, the use of contingent workers in this area could allow businesses to operate more efficiently, compared to companies with in-house IT staff. If IT solutions are required, they are normally needed swiftly.
If a company website is unavailable or an email server fails, for example, the business may be unable to communicate with clients and customers. As a result, they will need IT professionals to work quickly to resolve the issue.
Rather than relying on in-house staff to remedy the problem within standard working hours, companies can use global independent contractors to work around the clock to get the problem fixed. By minimising downtime, companies can effectively cut costs and maintain customer and client satisfaction.
Whilst most companies rely on a core network of permanent, in-house staff, many businesses are keen to reduce their workforce. By doing so, they can cut costs in numerous ways. Employing contingent workers enables businesses to reduce their outgoings considerably; regular salaries are avoided, as is the burden of NI contributions. Similarly, businesses can operate from smaller bases if they rely more heavily on freelance consultants and contingent workers. Rather than financing large offices or workshops, companies can use off-site freelancers, thus reducing the overall operating costs.
Understandably, many businesses are reluctant to outsource work in case the quality suffers. Whilst there are potential difficulties in hiring contingent workers, these obstacles can be overcome. By using a reputable platform, with approved freelancers, businesses can be sure that the individuals they are working with are experienced, qualified and committed to their area of expertise.
Although many people assume that independent contractors lack the employee loyalty associated with in-house staff, this simply isn’t the case. Once hired, an in-house employee may allow their job security to affect their performance in a negative fashion. In comparison, a contingent worker is reliant on positive feedback. Both their pay for the project and their reputation depends on the quality of their work, their professionalism and their efficacy. This can result in outsourced workers providing a better service and fostering loyalty towards their client.
Similarly, working with a contractor or freelancer doesn’t prevent a business from nurturing an on-going relationship with the individual. Many businesses use the same freelancers repeatedly, simply because they are happy with their work but want to benefit from the freedom of using contingent workers, rather than hiring an in-house staff.
Whilst some employees may prefer the security of an in-house position, many value the freedom of working as a freelancer. By operating as a contractor, rather than an employee, individuals can choose their own workload; accepting projects in accordance with their other commitments and family life. This enables workers to create a manageable work-life balance and, in turn, can result in them being happier and more productive.
With contingent workers accounting for a growing part of the workforce, it appears that many businesses are now focusing on hiring for specific business needs, rather than for on-going management.
As hiring networks allow freelancers to connect with potential clients, it’s easy for businesses to find candidates which meet their requirements. In just a few clicks, companies can locate an expert software engineer, an experienced developer or a well-known designer, depending on their needs. With many professionals preferring to work on a per-project basis, it seems that today’s top employers are those who enable individuals to work on a freelance contract, rather than those who demand staff make a permanent commitment on a traditional contractual basis. Of course, the rise in reputable and efficient outsourced workers will only continue if employers and potential freelancers are able to get connected. Being able to find a contractor with the appropriate experience and expertise is essential to the ongoing success of independent consultants.
When matching the best candidates with top employers, Endorsed provides a platform which enables clients and contractors to connect and build a career network. By facilitating an employer’s need to hire experienced professionals and matching them to qualified and able workers, we help businesses to succeed with fewer costs and enable independent contractors to attract quality projects and commissions.
Felicia is an entrepreneurial startup enthusiast and content contributor towards software engineering and all things technical. Anything related to jobs, career, leadership or talent - chances are that she already covered it.