Why Contract?

As a recruiter, job seeking marketing professional consistently ask me, "Why would an employer hire a contractor instead of a full time employee?"  Never having worked on contract, but knowing someone who has and recommended it, these professionals are cautiously optimistic about exploring such work.  My goal never to convert, but simply dispel the many misconceptions about contract, I proceed to educate.  I begin by sharing some unavoidably compelling evidence regarding the ever increasing role of contract work in our job market and economy. 

DID YOU KNOW?

• During the third quarter of 2013, 3.03 million contractors were employed per day by U.S. staffing companies (American Staffing Association)
• Labor experts are projecting the rate of contingent worker growth in the next several years to be three to four times the growth rate among traditional workforces, and eventually 25% of the global workforce  (Tammy Erickson, Harvard Business Review)
• Full-time employees will become the minority of our nation's workforce within the next 20-30 years (cnnmoney.com)

Now commanding their full attention, I share the number one reason companies large and small hire contingent staff.  Money.  In a post recession economy with continued volatility, corporate budgets remain tight and permanent hiring standards cautious.  In such an unpredictable business environment, contract employees are in high demand, as they provide businesses with specific professional skill sets for a predetermined time period without the cost burden of dedicated staff.

"Why is this?" immediately follows.  If contractors are compensated at a higher hourly rate for a project or finite time period they still cost less, as employers are not required to pay benefits such as insurance, 401K, or paid time off.  For this exact reason, a majority of companies fulfill their contract staffing needs through agencies that not only are able to identify qualified candidates quickly, but provide candidates with varying degrees of benefits, as well as pay their taxes.  Contractors working through such staffing agencies often are paid at a rate of 30-100 percent higher gross pay than that of a permanent employee.

Perhaps most important, employers works with staffing agencies to avoid co-employment risks.  This means that if a company or agency treats a contractor as a permanent employee, but doesn't provide them with the same benefits, they could be liable if the contractor were to take them to court.  Working with a staffing agency creates a buffer between the company and the contractor reducing the company's risk.

Companies also like to engage contractors, as a contingent workforce allows them to meet the ebbs and flows of project and work demands with well qualified candidates.  Candidates who previously have done similar work in different business environments.  This allows them to bring diverse expertise and perspective to a new role, as well as quickly and effectively achieve results.

WHAT'S IN IT FOR ME?
Now better understanding why companies employ contractors, I'm asked in a variety of different ways, but never directly, "So, what's in it for me?"  What's in it for a contractor is much more than many career perm professionals would consider.

I recently had lunch with a contractor, now friend, who I've placed in several positions over the years.  As we discussed her current assignment, I asked if she'd ever consider finding a permanent job.  Her response, "I can't say never, but I love the variety of work I'm doing for such great companies.  I just can't see myself wanting to work in a permanent role anytime soon."

It is true that contractors like my friend not only are diversifying their experience and broadening their skill sets, but building better resumes then their permanently employed peers.  In a variety of business environments, such contractors are exposed to new and cutting edge technologies and able to move from company to company without being considered a job hopper.

"You mentioned that contractors can be paid more than full time staff.  Can you elaborate?"  Again, I share that contractors often are paid at a rate of 30-100 percent higher than their permanent peers.  Since there is less overhead incurred by a contractor, an employer is often able to pay more. Also, it is common for a contractor to work overtime hours to meet tight project deadlines.  These additional hours can increase a contractor's pay dramatically.  When such a project is complete, contracts often have the flexibility to chose whether or not they want to start a new assignment right away.  

Since technology now allows for a successful remote workforce, contractors also have professional flexibility not always available to their permanent counterparts.  As long as deliverables are met, many managers do not require contractors to work onsite let alone a traditional 8am-5pm day.  This allows contractors to better manage ever increasing personal responsibilities including children and family.  Contract also allows for flexibility when taking time off.  This could mean a vacation, or an extended time period such as a child's summer school break.

I also make a point to tell them about a benefit of contract that often gets overlooked - not having to participate in office politics.  Instead of getting caught up in typical workplace discord (who is getting promoted, make more money for doing less work, or sucking up to the boss), contractors are able to focus on their responsibilities and deliverables. Since contractors are brought on to perform a specific function for a finite amount of time, they don't need to worry about the drama or dysfunction that often leads to significant job dissatisfaction for their perm peers.  This doesn't mean that contractors aren't working within complex environments or with challenging personalities.  At the end of the day, however; contractors don't need to concern themselves with positioning for a promotion.

OH YEAH? WELL...
By this point, many former skeptics are open to exploring contract.  For those who remain unconvinced, their top objection is always the same and generally starts with "Oh yeah?  Well..."  "Oh yeah? Well contract does sound interesting and I'd love to expand my professional experience and skills, but I need job security."  (An ironic statement, as most are meeting with me after being laid off from a full time permanent role.)  I tell them that because of the devastatingly widespread layoffs of the recession, many professional no longer believe in job security and have turned to contract work to regain control of their professional futures.  As one such professional told me, "Working on contract is a way for me to take more ownership of my career by deciding what companies I want to work for and projects that interest me most."

For those who aren't ready to concede that contract is a viable work option, I share or remind them that managers today perceive hiring permanently a big commitment, or sometimes even a risk.  If they're going to bring on a new employee, these managers expect candidates to have near perfect skills and then some. Managers not concerned about risk, however; often don't have budget to immediately bring on a permanent resource.  In either scenario, working as a contractor allows a job seeker looking for permanent employment to demonstrate their skills first-hand and impress a hiring manager, or work until budget for permanent employment becomes available.

For those who just may never give contract a chance, I tell them at least to consider this...  Job seekers who choose not to work until they find a permanent opportunity run the risk of becoming less marketable to an employer. Work gaps, even six to 12 months, can make a manager question a potential candidate's employability.  Working on a contract in between permanent roles is a legitimate way for any professional to stay relevant.  It also allows them to gain new experience that may be exactly what a hiring manager is looking for in a permanent employee.