Contract staffing - Backing businesses on their way to becoming Antifragile

May 14, 2021

The Pandemic of 2020 has changed the trajectory where people, organizations, economies and governments were headed. Bringing a sudden downturn in business, the crisis has left companies worried about the further effect of such events. This situation puts a spotlight on the importance of being ‘Antifragile’. Being antifragile doesn’t mean that one is not affected by such uncertain times. Instead, it reflects robustness of a business to thrive and grow in such difficult times.

One of the key strategies which enable businesses to be antifragile is contract staffing. Although contract staffing has been deployed by firms over time, the new normal has highlighted its acute importance.

The Agility of Contract Staffing:

With business sentiment improving with the new normal, there is a building up of pent-up demand. Contract staffing is an ideal way to fulfil this demand in a quick and efficient manner. With increased acceptance of remote working culture, the talent pool available for contract staffing has grown multifold. Through an agile contract staffing strategy, companies can not only adapt to the changing market conditions, but also enjoy benefits of a flexible cost structure.

In addition to agility that contract staffing provides, there are many other advantages to fuel a company’s growth. These manifold benefits include:

  • Increased efficiency in recruitment process: Hiring contract staff is a relatively faster process when compared to permanent hiring. It reduces the workload for the HR department, while making it more efficient to build a pipeline for permanent employees. If the contract staff fits well with the company culture and requirements, they can be a long-term asset to the organization. While on the other hand, if the candidate does not fit well, they won’t be a large with contract staff’s tenure being limited to the contract term.
  • Productivity booster for permanent employees: Contracting helps offload excess work from full-time staff during high-activity periods. This in turn helps create a better work-life balance for permanent staff, boosting their morale and thereby improving their productivity.
  • Ease of experimenting: While testing new business models, using contract staff is a good way to validate the model before investing significantly. It provides teams with the flexibility to experiment and adapt based on the success or failure of the trial. Moreover, contractual staff potentially bring in a new perspective, enlightening existing staff on new trends.
  • Increased pool of experts: In the past decade, organizations would consider looking for PEO services largely for general roles. However, in the present day some organizations are not only facing headcount constraints, but also facing the need to be cost efficient. They are keen to utilize expertise that PEOs and staffing firms can provide to help make the business perform well. When a unique skill set or specialization is required for a particular project, contracting can be a good way to source this. It ensures companies can bring in an expert for the required projects as and when required, reducing the long-term costs of retaining an expensive resource.
  • Outsourcing expensive headcount: There is a growing trend of many senior roles within the organization being outsource to PEOs. Companies can hire the senior experts as contractors under agency contract nowadays and avoid having an expensive headcount on their rolls.
  • Rehire expert talent despite headcount reduction: Owing to the pandemic, many companies were forced to cut their headcount over a short duration. With the economic situation improving, some of these companies can consider rehiring their ex-staffs under contract basis, and overcome restrictions placed in hiring full-time headcount. This enables companies to have quick onboarding and easy assimilation of the contract staff into the teams as they already know the organization’s operations well.
  • Network effect: Candidates working on a contractual basis usually have a large network of organizations, people, etc. With the growing demand from startups and SMEs for contract roles, this network could be precious for these smaller firms to find business opportunities and synergies with different organizations.

Challenges of contract staffing and how to overcome them:

Although contract staffing comes with many benefits, implementing it as a business strategy does possess its own set of challenges. These can be mitigated by a combination of leveraging technology, engaging Professional Employers Organizations (PEOs) and employing prudent man-management.

Listed below are some of the key challenges of contract staffing and how to overcome them:

  • Challenges faced with candidate search and manual onboarding: HR teams face a host of challenges while using manual processes for recruitment. Finding the right contract staff and onboarding them efficiently can be tedious and time consuming. However, recruitment today has become much easier with digital solutions. Organizations can leverage technology to fasten and simplify the recruitment process from end-to-end. This includes conducting candidate search, shortlist, and interviews using digital applications. These applications also ensure inefficiencies in manual onboarding are eliminated. Another way to overcome this challenge is to engage PEOs. PEOs can alleviate the HR teams’ entire burden of sourcing and managing contract staff.
  • Challenges faced with Integration of contract staff: When new contract staff come onboard, there can be challenges of assimilating them within the team. Existing employees may not be open or accommodating to the contract staff. The key to resolving this is through effective communication. Ensuring there is clear understanding of the objectives and purpose of hiring contract staff by both sides helps build good working relationships. Additionally, conducting ice breaker sessions is a good way for staff to get to know each other better.
  • Challenges with trusting contract staff: Due to the temporary nature of contract staff, they are usually considered as outsiders. This typically leads to a lack of trust from the existing staff. Though this perception is difficult to overcome in a short period of time, conducting reference checks is a good way to understand the work ethic and character of contract staff. Alternatively, companies can outsource this task to PEOs who typically conduct due diligence on candidates they recommend. Moreover, the PEO firms are able swiftly replace contract staff who don’t pass the checks.

Topics: HR & Payroll Services, Contract Staffing

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