Hiring decisions are of great importance to the success of a business. This is because wages are one of a business’ largest costs and the work of employees is tightly linked to the earnings of a business. As a consequence, it is important for businesses to consider how to best manage the hiring process. One such method is contract staffing. In this article, we’ll explain what contract staffing is, its advantages and disadvantages.
What is Contract Staffing?
Contract staffing is where a business hires an employee on the basis of a specific agreement. This agreement is generally in the form of a written contract which will outline the basis of the employment. This could be that the employee works a certain number of hours for a period of time or until a task or project is finished. In many situations, these employees are not considered to be part of the permanent staff of the company but are hired for a specific purpose.
Examples
- Often in the construction industry workers are hired on a contract which expires when a project is complete.
- A law firm hires a paralegal to work part-time on a 12-month contract;
- A consulting firm hiring an expert in a particular software program on a 6-month contract; and
- A warehouse hires staff on a temporary basis through a labour-hire company.
How do Companies fill these roles?
To simplify the hiring process, businesses will often engage an external agency. This might see a business pay a labour-hire company to fill a temporary or short term position with a suitable person. Whilst the terms of such processes might vary, this is what some might consider contract staffing because the business ‘contracts’ the staffing process to another company.
What are the Advantages of Contract Staffing for Businesses?
There are several advantages to contract staffing for businesses.
- Businesses have greater decision power over the terms of employment.
- It may allow a business to cost effective access to an experienced person.
- Businesses can hire contractors for any time period.
- It affords businesses greater flexibility as it may allow it to meet demand in busy periods and keep wage costs low in slower periods.
- It lowers the business’ liability. Whilst the terms of an employment contract may vary, contract staffing often reduces the burden of sick leave and other such employee associated costs on the business.
What are the Disadvantages of Contract Staffing for Businesses?
There are also some disadvantages of this approach for businesses.
- Contractors may require training depending on the nature of the business or project.
- Contractors may leave the job for another contract worth more money.
- Depending on the nature of the role, a contractor might work other roles at the same time. This could mean that the contractor has conflicting priorities or works more slowly on the project than they otherwise would.
Summary
In summary, contract staffing is a method of alternative staffing where a business hires someone for a role under a contract. The nature of this arrangement can vary greatly. However, as a general rule, it is a short term employment arrangement dependent on contract terms.
