While recruiting may appear as simple as posting job openings, reviewing applications, and interviewing candidates to choose the best one, it can be quite the opposite.
Recruiters are always looking for new and innovative ways to cut company costs and optimize hiring processes while battling inconsistent labor demands and a fluctuating economy.
Companies are beginning to explore flexible and scalable workforce strategies to quickly tackle talent acquisition requirements as they come, hoping for little to no financial loss.
One such approach that is now on the rise across various industries and a hot topic for recruiters globally is contract recruiting. Contract recruiting is a recruitment method where companies can hire employees for a defined period.
From the tech industry to law and marketing jobs, contract recruiting provides companies with the flexibility, scalability, and efficiency they need to reduce HR operating costs and increase productivity at the same time.
In the United States alone, companies hire approximately 14.5 million contract workers every year. Similarly, independent contractors contributed $1.3 trillion to the U.S. economy in 2021.
Contract recruiting helps companies bridge their skills gap and easily access large, targeted pools of talent, bringing fresh perspectives to the table.
Contract recruiting also helps companies scale up and down as needed and reduces the risk of a “bad hire,” which may cost as high as 30% of the hire’s annual salary.
This article further explores the benefits contract recruiting can bring to your business and the various industries where contract recruiting can make a huge impact on an organization’s success.
1. Benefits of Contract Recruiting
Contract recruiting is often employed when companies need to fill roles for a defined timeline or a specific project. When the project or contract runs its course, you are no longer obligated to retain the employee.
Similarly, because companies are hiring the services of an independent contractor, they don’t need to pay employee benefits, such as holiday time and sick leave; they also don’t need to provide insurance and pension plans, and contractors can take care of their taxes.
These factors make working with talent on a contractual basis attractive for companies.
However, even though contract recruiting is widespread, some companies are still unaware of the benefits it can bring them.
Here are some reasons companies choose contract recruiting over hiring a permanent employee.
2. Flexibility
If you need skilled expertise and talent to fill a particular role for a definitive period, then contract recruiting is the way to go.
The flexibility provided by contractual jobs allows recruiters to hire candidates for specialized roles that may otherwise have little scope for advancement as a permanent role.
Similarly, companies sometimes need talent temporarily during workforce shortages or an extra pair of hands for a project or during peak workload seasons.
The flexibility of this recruitment approach allows recruiters to customize talent acquisition requirements at any time and with little to no expense.
After the contract ends, you can either extend the contract, hire them as a permanent employee, or opt to go your separate ways, giving you the flexibility and ease to adjust your workforce according to your needs.
3. Cost-Effective
Along with flexibility, contract recruiting is a cost-effective solution for recruiters looking to add to their existing workforce or fill skill gaps for the duration of a project.
Instead of investing in permanent employees and bearing the costs of onboarding, training, and other benefits that attract candidates to permanent roles, contractual jobs reduce these overheads substantially.
Similarly, companies can employ independent contractors who are already skilled professionals in their fields.
This helps businesses quickly scale their workforce to get the right talent during peak workload seasons, while considerably reducing the costs associated with under or over-staffing.
Contract recruiters also have extensive networks of passive and active candidates they can contact when there’s an open role, saving time and minimizing the expense of advertising vacancies.
A contract recruiter’s expertise also allows them to conveniently identify and recruit competent candidates that meet immediate business requirements, without investing in long-term employee development and progression.
4. Expertise
Companies often need industry expertise and skills for specific projects. Hiring independent contractors who are already experts in that field will not only save time and costs in training, but they can also hit the ground running, allowing companies to onboard them swiftly and start seeing results.
Contractual employees also typically work remotely, which means companies can hire outside their region, allowing access to specialized skills all over the country and sometimes even internationally.
This widens your potential candidate pool. It also makes it likely to partner with candidates that charge a fee lower than US-based remote workers.
Additionally, companies that collaborate with contract recruiters gain access to their market knowledge and diverse pools of qualified candidates they need to fill their vacancies as soon as possible.
5. Reduced Risk
When you hire a permanent employee, there are legal requirements you must meet and labor laws you must abide by, making the hiring process complex and confusing.
On the other hand, contract recruiting reduces the risks of litigation and HR disputes simply because the contractors are not your employees.
The nature of the working arrangement is such that they are not entitled to the same legal protections and benefits as full-time, permanent employees. Similarly, the contracts can also be structured to minimize legal and financial risks.
6. Trial Period
Contract recruiting is also the perfect opportunity to test candidates, their skills, and how well they fit in your organization before hiring them as full-time employees.
This mitigates the risk of a bad hire, which costs some companies up to $240,000. Hiring a new employee can be rigorous and costly, but it’s worth doing it right the first time because a bad hire will cost your company even more.
7. Business Transformation
Contract recruiters not only connect hiring managers with the right talent that transforms their businesses, but also bring insights into the latest market trends, salary benchmarks, and competitor hiring practices that help companies make informed decisions.
Additionally, contract recruiters can easily spot obstacles in HR practices that hinder a company’s success. They provide personalized and cost-effective solutions ranging from digital transformation initiatives to deeper organizational restructuring and process improvement.
Onboarding a contract recruiter for a project that requires industry-specific professionals or to bridge skill gaps within your organization is an ideal solution for modern businesses.
Conclusion
Vacancies that remain unfilled for longer periods not only halt business success but cost companies a lot of money. Contract recruiters often possess the key to continued business profitability and productivity.
For instance, the demand for technical skills is causing employers to constantly turn to contract recruiters to connect with candidates who can meet their talent acquisition needs.
Contract recruiting is not only beneficial in the tech industry, however. It is also popular in media, human resources, law, finance, and marketing.
For instance, in marketing, contract recruiting is especially useful for jobs such as copywriting, video content creation, market research, or campaign management. Contractual jobs allow companies to connect with marketing professionals easily for projects or a trial period before hiring them full-time.
In law, contract recruiting is a practical approach for hiring legal professionals (especially during periods of high-volume work) to assist with research, contract drafting, regulatory support, trial preparation, risk management, and much more.
In the finance industry, contract recruiters can connect you with experts in banking and financing who can carry out tasks ranging from mergers and acquisitions to risk mitigation and data management and analysis.
And, this isn’t even half of it. Contract recruiting is a well-known, profitable form of recruitment in all types of industries.
If you’re looking to connect with a diverse range of contract recruiters, then Workfully is the right place for you.
Workfully is a digital recruitment platform where you’ll be able to collaborate with recruiters of various industries to get the right, skilled professionals your company needs at the right time.