Major companies as well as small startups hire contract workers for two important reasons. Firstly, to save lead time and to allocate resources wisely. The second reason is to save costs in production, labor and logistics. Contract management brings efficiencies and effective cost control. Companies need to consider when they should hire contract workers. Contract workers should ideally be hired for work that is not central to the company’s business. Work that could be done by professionals who do not need to be closely supervised. Work that is essentially short term.
Managing contract workers is a growing trend. The number of temps, contract workers, freelancers and interns is increasing exponentially, enabling companies to fulfil their staffing needs. They offer companies a host of advantages. Regular employees that go on leave can be replaced by temporary or contract workers to help work schedules to go on uninterrupted. Hiring temporary workers translates into savings as they do not get benefits like health insurance etc, which regular employees are entitled to.
Contract management also provides flexibility to HR to keep staffing at its optimum. Temporary workers therefore help companies reduce staffing costs. These employees come well trained and properly screened. Contract management enables regular employees to work at their optimum level saving them from being overworked.
Another advantage of hiring temps is that it gives companies a chance to consider them for future regular hires. Many companies hire temps for a tentative period to judge the skills and suitability for the job. This method of evaluating potential hires works well for most companies.
A company may not have employees with requisite experience and expertise to carry out specialist assignments, but it can hire specialists, creatives and even senior managers on contract basis to suit its short term staffing requirements.
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How to hire and manage contract workers: Contract management process
Companies normally rely on agencies for hiring temporary employees. It becomes important for them therefore to choose the right agency to fill their staffing needs. These agencies specialize in providing well trained workers in a particular sphere or sector. It is also important to ensure that these workers are properly screened by the agency before they come to the company that is hiring them. Relevant questions must be asked before hiring the agency. it should also provide references from peer companies that have availed its services. To protect against any claim by a temp worker, details of workers compensation insurance and other liability insurance that the agency already has should also be asked for.
Companies can also hire and manage contract workers on their own. They can access trade and other associations to hire temps. In such cases, screening and vetting them would have to be done by the hiring company, involving a certain cost.
Once a company hires contract workers, it needs to manage them like it manages its other workers. All employees including temporary employees come under the purview of laws relating to harassment, discrimination, health and safety. Laws relating to minimum wages and overtime should be scrupulously adhered to as well. It is important to make them aware of company’s expectations, in writing. Job description, deadlines etc should be clearly spelt out. Contract employees’ work related and other requirement must be looked into and attended to, just like those of regular employees, even if certain long term benefits are not extended to them.
Conclusion
Contract employee manager must make the temp employees feel valued. Once these employees sense that they are contributing to the companies goals and progress, they feel motivated and perform better. So it is a win win situation for the management as they get a future pool of job ready employees if and when there is a need to hire full time workers.
References:
- How to manage temps and contract workers. The Hartford
- Contract workers vs employees: what you need to know, Jennifer Post, Sept 20, 2018
- Pro and cons of hiring employees vs contractors, Feb 11, 2019
