Contractors Replacing Employees
More insights from our Senior Contract Consultant, Odette Shearer, who was again featured in the New Zealand Herald in an article on the benefits in contracting for both employer and employee.
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To read a transcript of the article, see below.
Twenty years ago the contracting field was dominated by accounting contractors but today contractors are across all business and corporate roles, and the use of them is increasing. By Val Leveson
“Today’s contractors provide skills and expertise that’s often missing as companies are running leaner in tight economic times,” says Carmen Bailey, consultant director of Emergent.
Emergent was started specifically to meet the contracting demand. “We are the only recruitment firm here totally dedicated to contracting. There are different skills around interviewing and the technical ability to deliver,” she says.
So why would companies go for contractors rather than full time employees?
Jane Wimsett, senior consultant at Emergent, says it’s an opportunity to buy in expert skills when you need them – rather than having to incur the cost of training existing staff.
There is a speed of execution – you can get the skills in immediately. She says it’s also about cash flow – not carrying staff in times you don’t need them, there are no long-term commitments if the business is facing challenging times.
Bailey says: “it’s better to get a star for 12 months than an ordinary performer for 12 years.” Sometimes, she says, it’s about trying before you buy. Forty per cent of Emergent’s contractors go permanent. “It happens that companies decide to make their position a permanent role – and it’s the contractors choice whether they want to do this or not.”
Contractors can trial different organisations and take the best from companies they work for into helping others. She says contractors have to be responsible for their career growth, have to be confident in their area of expertise and be able to get in and do the job.
“It’s also about what they want. Most contractors are very project orientated. Some want work/life balance where they work nine months a year, and travel for three ….” Bailey points out that years ago contractors could expect premium salaries, but that’s not the case now. “This could happen with really specialist skills, but goes not generally.” She says she knows people who have been contracting for 14 years and have not been out of work. Bailey ways it’s difficult to know how many people in New Zealand are contracting as there is no data collected.
The character traits a contractor should have are: confidence, adaptability, independence, be project orientated, achievement focused, not risk averse, have some leadership qualities, have expertise, Bailey says. “In fact contractors are brains for hire.”
Mark Milbourn has worked as a contractor at times throughout his career in both Britan and New Zealand for nine years and contracting for about five of them. His background is in architecture, which has developed into project management of development construction and engineering projects. He says there are many advantages in being a contractor for “someone like me who likes the challenge of projects”. He says if possible he goes in at the start of a project, finishes it and can then move on. “It’s solid – something real to look back on and I can say that I built that. It brings a good sense of self-worth”.
He says he also likes the fact that he can avoid internal company politics but it can be a disadvantage that when going in to an organisation it takes a while to understand relationships and how the company works. “However, I’ve been doing this a long time now and I can usually pick up on the essentials quickly. One of the things a contractor needs is good communication skills and people skills.”
“It’s about being able to grab a complex brief, negotiate relationships and pick out the strategically important ones.
The contracts Milbourn does are usually a year to 18 months. He suggests the following for contracting project managers to consider: People matter – utilise the talent around you, don’t panic – there is always a solution somewhere; communication skills are critical; and have tenacity.
Hiring contractors is particularly good for small to medium sized businesses, says Odette Shearer of Pohlen Kean. “It’s a way of bringing in specialist skills that you doing have in your organisation usually. This could be when you’re looking at a new strategy, implementing change or new projects.”
She says when there’s a high degree of change in an organisation, it’s good to bring in an outsider rather than someone who is embedded in the culture. Companies may also need a contractor to cover for parental or extended sick leave.
"There are also peaks and troughs in a company – key sales periods or the end of the financial year may require more people to be on board.”
She says when a company is for sale or a merge or acquisition is happening contractors can be vital. She says in New Zealand there is always going to be a demand for contractors in certain areas: Human resources, change management and the manufacturing sector and more.
“The market is getting less reactive as far as contracting is concerned and are more thorough in the selection of contractors.”
Bailey says checks and interview processes are done as thoroughly for contractors as for fulltime employees.
“It’s just done a lot quicker.”