With the United States flirting with full employment, many cutting-edge companies are turning to consultants, freelancers, and other contingent workers to meet the skills shortages they face. Employing a significant percentage of non-employee workers can build in the flexibility and scalability that companies need in order to compete in today’s competitive environment. Using non-traditional workers and building a pool of outside talent gives your company a jumpstart when you need to quickly increase production, launch a new product, create a new marketing plan, write custom software, or complete any other project that requires specialized skills.
A sizeable temporary workforce creates several advantages. First, it infuses your company with new “blood,” a diverse stable of eager talent that can spur innovation and enthusiasm among your full-time employees. Using freelancers for ad hoc projects and new tasks allows your traditional workforce to continue with business as usual, concentrating on the jobs they know and perform well. Finally, hiring contractors brings in expertise only when it is needed and can contribute to revenue and profits. You can off-board these workers while avoiding emotional and morale-sapping layoffs.
To be successful, however, a contingent worker program must be able to not only find and hire skilled non-employee workers, it also must be able to keep them for the duration of a project and re-engage them when the next similar task comes up.
In short, retaining contingent workers is just as important as holding onto your in-house staff.
Contingent Turnover is Costly
There have been plenty of studies calculating the cost of losing a valuable employee. The costs of advertising the vacant position, spending management time reviewing resumes, and interviewing candidates add up quickly. Some estimates claim the cost of losing a productive wage worker can be as high as 75 percent of his or her salary and the cost of a highly skilled salaried worker’s departure at more than 200 percent.
The permanent loss of a temporary worker can be even higher, in terms of productivity, “brain drain,” project delays, and work product quality. America’s robust economy exacerbates the problems associated with contingent worker churn. More and more people with rare and coveted skills are joining the ranks of independent contractors and freelance professionals. Still, competition remains fierce for these talents. Demand is skyrocketing, and supply is limited. Positioning your company as an attractive landing spot for external workers is no longer enough. If you lose a rainmaking contingent programmer, writer, project lead, or network administrator because you do not meet their requirements, it will be very difficult to regain that person’s trust. In all likelihood, you will have cut off your access to a critical resource.
So, while it is necessary to leverage your employer brand and market your company to a broad, diverse pool of contingent workers, you also must reinforce your image as a great place for those non-traditional workers to spend a few months. You probably already have developed a stable of “go-to” freelancers you tap when projects in their lines of business come up. What happens if those formerly reliable outside talents suddenly decide they would rather work for someone else when the next crisis or opportunity arises at your firm? Your company probably will lose momentum and continuity. Workflow will be disrupted, and you may not be able to respond properly, missing out on a profitable initiative or losing goodwill among your customers.
It is management’s responsibility to uncover the risks that could trigger such a scenario. Eliminate your company’s contingent worker policies that may be pushing external talent out the door and create and build upon your strengths that keep contractors engaged, happy, and coming back for more.
Why Contingent Workers Leave
In our experience, Metasys has found that independent workers quit or do not return to companies after their contracts expire due to three primary factors:
Among full-time workers planning to leave their jobs, more than half cite a lack of confidence in or disagreement with their managers or company leadership. Contingent workers are just as likely to leave for these reasons. In fact, if gig workers believe they are disrespected or treated as inferior to internal staffers, they may be even more willing to bail out. They have much less invested than their full-time counterparts, and they can likely find a new gig in short order. Companies must take precautions to show contingent workers they are valuable contributors, not commodities that can be used and thrown away.
It pays to vet contingent workers not only on their skills and experience, but also on how well they fit the company culture. Disconnect can limit contractors’ productivity, but it also can cause them to cut their time with the company short, leaving talent vacuums that hamstring projects. Freelancers are freelancers because they prefer that lifestyle to the corporate structure. Companies must treat contingent workers the same as employees in terms of rewards and challenging projects, but they should also hold fast to differences between traditional and non-traditional workers in terms of supervision, work hours and location, discipline, coaching, etc. These functions should be handled in whole or in consultation with the hiring organization or managed service provider.
Training, too, should be the domain of the contingent talent vendor, but contractors and freelancers need to feel every job they take will make them more marketable in the future. Firms that use contingent workers should provide the types of tasks and projects that will aid them in expanding their skills and adding to their resumes. Giving gig workers the opportunity to learn also positions companies as preferred clients, placing them at the top of the list when firms compete for their services.
Retaining contingent workers in today’s tight labor market can create strategic advantage for organizations. Maintaining strong relationships and ongoing engagement with contract computer programmers and engineers, freelance writers and graphic designers, and other fixed-term talent pays off in several ways. First, it ensures you have access to the critical skills you need to respond quickly and effectively to market opportunities and challenges. Second, it allows your firm to scale its workforce to match demand, seasonality, and economic conditions. You can easily add external workers during booms, extend them while the good times roll, and simply allow their contracts to expire when the gravy train derails. Finally, mitigating contingent worker turnover provides a bulwark against other talent risks. If key full-time workers leave your organization, independent contractors who have worked with you previously can step in to fill the void. This safety net buys you time to properly vet full-time replacements, reducing the risk of poor hires.
Metasys can tailor a contingent workforce management program that includes direct sourcing of talent through our recruitment relationships. Direct sourcing leverages your employer brand and our expertise and industry insights to support contingent retention. Metasys combines state-of-the-art technology and human intelligence to monitor and create optimal responses to the market trends, regulatory changes, and talent supplies that can affect your ability to attract and keep outside talent. Metasys has built a best-in-class service contingent worker retention suite as part of its total workforce solution. To find out more about our comprehensive answers to your staffing challenges, contact Metasys now.