The Future of Work: Why Contracting is Becoming More Popular Across Industries
A recently published report entitled IT Contingent Workforce Guide by Motion Recruitment has found that in the IT industry alone, one out of every five tech jobs is occupied by contract workers. Around 90% of employers said that they would be dedicating more funds to contractors rather than the hiring of employees and in a myriad of other industries, the contracting job market is on the rise. Factors such as the fear of a recession, market uncertainties, more stringent corporate budgets, and the rise of AI have led to a wish for shorter, project-oriented working relationships. If you wish to know why contracting may be a perfect fit for you, read on.
Faster Hiring Processes
On average, hiring an employee takes between three and six weeks, though this time period can be longer for manager-level recruits. Hiring someone you wish to work with closely on a daily basis takes considerably longer than outsourcing work for specific projects—some of which may be short-term or one-off projects. During the hiring process, your focus as a business owner is on a contractor’s skills and past projects rather than on their ability to fit into your corporate culture or continue to provide value for your business owing to a wide array of skills. When hiring per project, especially for those that can be completed remotely the amount of time spent can be reduced to days, as in-person interviews are unnecessary and (depending on the job) contractors can be hired based on past portfolios alone.
Reduced Costs
Hiring a contractor for a specific job can reduce costs by 20-30%. This is because businesses save on salaries, bonuses, payroll taxes, work equipment, training, paid leave, and similar. Of course, there are costs you cannot completely curtail. For instance, if you hire contractors in the realm of construction, then you will have to incur costs associated with reducing the builders’ risk of injury. Key steps to take include setting up a safe workspace, paying workers’ comp, and encouraging contractors to be physically fit to reduce the likelihood of accidents. When opting for a contracting arrangement, it is vital to ensure that the contractors are not actually employees. The usual assessment of whether someone is an employee is the “nature of the business” test. State laws typically deem someone an employee if they are hired to perform the work or services that a business provides. In some states (such as New York) businesses need to demonstrate three legal criteria in order to prove that a worker is a contractor. First, they must show that the person is free from control and direction in performing their tasks. Secondly, the person must be performing services outside your company’s usual course of business. Thirdly, the worker must be engaged in an independently established trade that is similar to the services they are providing.
Specialized Skills
In some industries—including those focusing on technology—there is a greater demand for workers with specialized skills such as AI, cloud computing, data analytics, and similar. Hiring contract workers allows companies to stay up-to-date technologically by counting on these workers for specific projects or time frames. There is no need to commit to hiring them long-term, especially if they are mainly needed for a specific task—for instance, data compilation and conversion.
A Demand for Flexibility
Hiring contractors means that you can count on a job getting done within an agreed time frame, even if a particular project requires out-of-hours work or work that is to be completed within a short time frame after notification. This also works the other way around. Contractors can negotiate flexible means of payment and request to be paid in a way that is most convenient for them—for instance, via PayPal or Venmo instead of standard bank transfers. Flexibility also comes into play in multinational teams working remotely from various locations. Businesses can hire workers in compatible and contrasting time zones so that teams are working around the clock and increasing their productivity.
Contracting is on the rise, with companies from a myriad of sectors ranging from IT to construction taking advantage of its benefits. Reduced costs, the ability to harness specialized skills, and increased flexibility are just a few reasons for its appeal. Today, teams are working from all corners of the globe, meaning that for many companies, business never sleeps.
