Thursday, January 7, 2010

The Benefits of Contract Workers

Would your business benefit from contract/temporary help?

Patricia Schaefer wrote a great article for Business Know-How ( that I thought I’d summarize and add some thoughts to. You can find her article in it’s entirety at

Since the birth of the Temporary Staffing industry in the 1940’s, the industry has evolved from “seat-warmer” type of fill-in employees to the highly skilled (and highly courted) valuable contractors. The use of these highly skilled employees has become the norm across most industries, from health care to construction to information technology. In fact, according to the US Bureau of Labor and Statistics, the temporary work industry has grown 5 times more than national employment.

In evaluating your business needs, keep in mind some of the benefits of utilizing contract employees including:

1. Flexibility your business needs to adjust quickly to workload fluctuations. Some of the reasons the companies hire temps include:
• Employee absences due to illness, vacation, disability or maternity leave, or sudden departure.
• Peak periods, special projects, product contracts, etc.

2. The ability to maintain staffing flexibility. Right now, the employment pool increasingly consists of a mix of temporary and full time employees. This creates a more efficient workplace and provides greater opportunities for both employees and employers.
• Contract work appeals to many types of workers including workers with: specialized skills, flexible hours, family commitments, education upgrades, industry expertise garnered from working with various clients.

3. Ability to evaluate talent. Many companies utilize temps in different ways to assist in the hiring process.
• Contractors are a great way to continue to produce at high levels while searching for a full time employee.
• Many companies also use agencies as a resource to hire the same worker for different projects at different times – which can lead to a hiring commitment.
• Companies can use contractors and evaluate them for full time openings with little commitment – if it’s not the right fit, the contractor can easily be replaced.
• A temporary or project assignment can also server as a “working interview”.

4. Savings of time and money. In the short term, it is generally more cost-efficient to hire contract employees versus full time employees. The responsibility that an agency covers (financial burden) with a contractor can include:
• Hours and money spent recruiting/sourcing candidates.
• Screening, interviewing, testing, hiring candidates.
• Payroll expenses, payroll and withholding taxes, paperwork.
• Training.
• Unemployment and workers’ compensation insurance.
• Employee benefits – medical, dental, vision insurance, retirement/401k, holiday pay, vacation time/pay, etc.

5. Contract employees provide specialized skills and industry experience. Contract employees today are highly skilled professionals that can tackle one-time projects with time and scope limits. They bring with them a wealth of experience in specific technologies and skills, along with different perspectives from other industry leaders.

6. Long-term relationships with a staffing agency. When you find a company that continually provides the contract employees that work successfully with your company, you can establish a long lasting relationship that positively affects both parties. A good (even exclusive) relationship with a good agency can help you more easily achieve your company goals.

How about concerns? One of the biggest concerns that companies deal with in evaluating their need for temporary or contract workers is the question of reliability. Some surveys conducted in the industry find an assumption that contract workers are generally less reliable than their permanent employee counterparts.

Joe Broschak, Assistant Professor of Organizational Behavior at the University of Illinois at Urbana-Champaign, shared some of his findings about a study of temp workers: “On average, these temporary workers displayed better performance relative to goals compared to their full-time counterparts.” For those temps later hired as full-time employees, Broschak reported that “they continued to become better workers after becoming permanent.”

The time is here. If you aren’t using contract employees, it’s the first of the year and a great time to evaluate your business needs and goals. Ask yourself the question: “Would your business benefit from contract/temporary help?”