The contingency workforce

by Barrie Hopson on October 18, 2009 · 0 comments

in New ways of working

There are some fascinating ideas and practices coming out of New Zealand which could have a substantial impact on thinking about employment in the UK.

For many businesses, projects are beginning to thaw but the headcount freeze remains. As a result, many permanent positions are being repackaged as contract roles which then keep costs and commitment   to a  minimum. The use of contractors in the short term can offer the best solution, helping clear the backlog of work created by restructuring and redundancies.

The supply of contractors is also growing as we see people re-entering the workforce from retirement due to significant financial losses, job seekers unable to find permanent roles and opting for a short   term fix, combined with more people looking for the ideal work life blend.

According to a recent survey conducted by Auckland based Crackerjacks Ltd, a contracting solutions website, 84% of businesses surveyed are currently using professional contractors and 89% believe that hiring contractors allows businesses to achieve the flexibility needed to succeed in today’s economy. The survey also revealed that HR Managers believe a key advantage of using professional contractors is immediate access to skills on demand.

Tony Wai, Crackerjacks managing director comments, “With optimism slowly returning to the market we are seeing more contracts appear across the professional spectrum. It seems to be common opinion amongst employers that using contractors is the way to staff-up and increase productivity without committing to on-going personnel costs.”

To meet this shift, Kirsty Erasmus, New Zealand manager of CXC Global, a contractor management company, suggests job seekers looking for permanent work should be considering contract roles to increase their job prospects. This of course is ideally suited to portfolio workers.

“Although job security may seem lower, permanent roles aren’t so permanent anymore. Contracting rates are higher and hours are more flexible. It’s a good way to keep earning whilst looking for permanent work and it’s not uncommon for a 3 month contract to be extended or even result in a permanent job offer.” She says.

North Shore based specialist HR consultancy – Clarian Human Resources, believe contracting is the way of the future. Company owner Ian Parkes explains, “Traditionally, professional contractors have been used for a number of purposes, such as a short-term fix for permanent vacancies, covering maternity and parental leave, bolstering capacity for project work and to provide expertise for existing staff”. But he explains that employers who can ‘do more with less’ in their organisations will pull ahead of their competitors. A key component of this is utilising a contingent workforce, as they have the ability to quickly engage with the work at hand and deliver in short-time frames

“While there is always a place for permanent staff, adding temporary workers to the mix gives a business an edge” says Ian.

A global research report released by Price Waterhouse Coopers, looking at “Managing tomorrow’s people” considers how businesses will operate in the future and the associated strategy for managing human resources. In this report it provides a scenario  where a tightening labour market shifts the power balance back to the individual and away from the collective – enabling individuals to develop portfolio careers, working on a short-term, contractual basis.

This scenario is also driven by the influx of Gen-Y’s . This  will mean HR will have to gear up for a new focus where people will see themselves as members of particular skills/professional networks rather than an employee of a company.

New Zealand based Crackerjacks reports that the conflict between the need for workers versus tight budgets will remain for some time yet. Firms need to look at new and innovative ways to source, engage and manage contractors.

The recession has forced us to find new ways to survive whether that’s in business or as an employee. I have no doubt contracting will continue to play a very important role not just in New Zealand’s recovery in the next 12-24 months but as ongoing and sustained trend globally.” Says Wai.

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