As the overall economy continues to evolve, businesses are changing the way they operate. Financial pressures and the need to respond quickly to market demands are making contract workers a vital part of the overall, global workforce.
In fact, business owners in North America experienced a seven-year high median revenue growth in 2018, with most markets are on target to continue seeing growth. Further, industry projections are stating that nearly one-third of the U.S. workforce will be shifting to contingent roles by 2026, and more than 35 percent of the Canadian workforce will do the same by 2025.
Successful businesses now expand and contract based on real-time market demand, rather than annual sales projections that can quickly become outdated. As a result, employers are increasingly drawn to the use of contract staff by the following benefits.
Contract staffing allows a business to quickly adjust to shifts in the marketplace or the strategic direction of the company. The ability to quickly ramp up or dial down a project can be critical for a company that experiences a surge in business or an urgent project.
From advertising to benefits to termination pay, the costs of a permanent hire include much more than just salary. And the intangibles (such as onboarding, training and administration) can be even more costly. On the other hand, the cost of contract staffing is simple: multiply the hourly rate by the hours worked. Contract staffing also allows more budget flexibility. Since the costs can be covered by different expense categories than permanent hires, the company is able to staff the project and maintain a leaner payroll.
Many companies like the “try before you buy” aspect of contract staffing. They get the time to assess skills and culture fit before making the commitment to hire the individual as a full-time employee. Many large businesses also shift potential liability by requiring the independent contractor to be covered by a comprehensive insurance policy.
Companies are increasingly turning to contract workers who can bring to the table a talent for project-based work that your average employee cannot. Contractors are often task-oriented and ready to roll up their sleeves immediately. Because they change positions and work in different environments, their training and development is constantly evolving and being enhanced in their area of specialty.
And many companies prefer hiring these highly skilled contractors, rather than retaining a large consulting firm where they might have junior associates doing the actual work.
The force of these advantages points to an inevitable conclusion: not only is the flexible workforce here to stay, but demand for it is growing, and many players in the human capital space are taking advantage of that trend.
Thinking about starting your own contract recruiting business, or just looking for more details about what the process entails? Make sure to contact us today!