The Benefits of Hiring Contractors in a Down Market

There are many terms that could describe the current employment market, but “confusing” and “contradictory” would probably be near the top of the list. Unemployment is at or near record low levels even while the Great Resignation continues unabated, and inflation and stock market fluctuations continue to be significant concerns.

You could call the current situation a “down market” and still an “employee’s market” as we all navigate the changes to the post-COVID workforce. It’s a time of uncertainty, for both employers and workers.

We spoke with Kelsey Champion, Manager Recruiting & Delivery at Think, about these unprecedented times and whether hiring contractors rather than full-time employees can resolve some of that uncertainty.

“The biggest shift that I have seen post-COVID is the workforce that is available to work, not necessarily actively looking for jobs but open to working in general,” says Champion. “I’m talking to people who are living off their savings for six months to figure out what they want to do long-term, talking with people who were focused on their Etsy shop during the pandemic and that’s their focus, that’s their passion … and now they’re going to do that [instead of returning to the workforce]. I’m continuing to see workforce leave the workforce.

“From a recruiting standpoint in this market, obviously that makes it very tough. It’s great to find people … with a project ending, but probably  95% percent of the people that we talk to are already actively employed. We have to figure out … what’s the value add, what’s the competitive advantage and what do I have to offer that’s going to pull you away from your current position?”

So in this challenging hiring climate, what are the attractions of the contractor model? First and foremost, for both employer and contractor there’s an opportunity to test-drive a situation before making a full-on commitment. “In terms of the actual benefit of contracting from the employer standpoint, I would say the old adage of ‘try before you buy’ [applies],” says Champion.

Any employer knows the large investment in time and money that comes with hiring and onboarding a new full-time hire, and the corresponding cost of termination if it doesn’t work out. Bringing on a contract employee reduces both the timeline and the cost significantly, with the initial vetting already done and the benefits paid by the contractor’s employer. And should things not go as planned, saying goodbye is less challenging also. “The biggest thing is having a chance to make sure the person is a cultural fit, a skills fit and everything else before committing to the cost of officially onboarding someone,” Champion concludes.

The worker stepping into a contractor role can similarly hedge their bets, knowing that if the role they take on with a given organization doesn’t go well, there may be a better fit among the contracting company’s roster of clients. Champion says, “From an employee standpoint, I think it’s the same benefit. Change is hard … If you’re working for a consultancy firm, a contracting firm, and it’s not a fit for you, you’re not going back to Square One and starting your search over alone. It’s much easier to turn around and find something that is the best fit instead of going back to the job boards.”

Another benefit to candidates is the ability to stand out from a potential crowd of applicants. “You’re working with people who have a direct relationship with the hiring manager, and your resume is getting directly in front of HR and the hiring manager. You’re not applying into an  applicant tracking system that has thousands and thousands of candidates, and you’re not applying into a job that has dozens, if not more, of applicants already sitting there. That’s probably one of the biggest competitive advantages … getting yourself out of that giant pile of resumes.”

Addressing a frequent concern about benefits in a contracting role, Champion says, “If you are a staffing firm and you don’t offer substantial benefits to your employees or associates, then you’re going to get beat out every time … you have to offer benefits just like full-time employees have.”

Also looming large in the post-COVID work, and typically a good fit in a contractor relationship, is the remote/hybrid work environment. “Pay is huge … pay is always huge. Some people are asking for what they feel they’re worth, ” says Champion, “but all the other things I feel are even more important since the pandemic, since people have had that time to be at home with their family and experience that work-life balance.”

In the end, “You’re certainly not the only one that’s speaking with an employee. They’re weighing out a number of offers, and it doesn’t just come down to the dollar figure.”

The current market, Champion concludes, “is very hard to navigate, and that’s not just from the employer or employment agency aspect, it’s for the employees too. We’re all in uncharted territory still, and when you’re going through uncharted territory, if you can date before you get married I feel like that gives everyone a little bit of security knowing that you’re not signing on the dotted line immediately.”