What Are the Reasons Why Firms Are Using More Contract or Temporary Workers Vs. Hiring Employees?

What are the reasons why firms are using more contract or temporary workers vs. hiring employees?

Need someone to do perform specific tasks or launce projects which fall outside your regular employees’ scopes of expertise.

Flexible in staffing the business. It is greater freedom to hire and let go contractors.

Increase access to skilled contractor

What are the advantages and disadvantages?

Advantage:

Provide missing skill of employees. The business only need that position for a period of time. For example, the company may need to hire temporary skilled worker to train staff to use a new application or illustrate for a specific project.

Employee is overwhelming of works due to busy time periods, but company don’t need more employee in less busy time period. Contractor or temporary workers is a good solution for flexible staffing in this situation. It gives the company more freedom to hire and let go contractors.

Contractor may cost less. Company do not need to offer benefit packages such as dental, pensions, unemployment insurance, social security and Medicare. Company can save money in providing equipment and work space such as office space, desk, laptop.

Eliminate the time and cost associate with training the working since in most case, contractors have specialized expertise for the particular task. Hiring contractor give business access to high level skills workers to compete with larger competitors. 64% of business agree that access to skills is more than beneficial than the cost saving. Contractor and temporary workers allow the company try out workers before decided to hired them as employee.

Disadvantage

Hiring contractor have higher risk of being audited by the government. It is importance to understand how local and government classifies contractors so that company have the correctly working relationship between contractor and business.

Contractor work in short period of time, so there is lack of loyalty. As company do not treat contractor as well as employee, contractor may view their work as a job and not expend any extra effort beyond the minimum required. As business can terminate contractor as will, the contractor can quit their work with less or without notice and go to other company which offer them higher rate. If the company rely on contractors too heavily, it may have higher turnover rate than employees.

The bad quality of contractor provide is also a problem if we choose unqualified contractors. They can harm relationship with client, and waste money, resource.

The product create from contractor is the contractor ownership, unless it specifically stated in legal document. Company need to keep legalities in mind to ensure that contracts and paperwork are in order

How does this impact the approach of a manger who may have a mix of employee and non-employee workers on their team?

Would they need to do anything differently? Is it more difficult to manage a mixed team or less difficult and why?

Since contractor is not company employees, there are different rules and expectations when approaching manage contractor and employees. Manager need to actively and thoughtfully manage the mixed team ( mix of employee and non-employee workers) so that they can give the best out put and ensure non-employee workers want