Why "Temp" Is No Longer A Four-Letter Word

Contract work is popping up in some unlikely places (including startups) as both employers and employees see distinct advantages to short-term employment.

Trudy Rushforth was one of three people working in the HR department at a late-stage startup in Silicon Valley that had recently been acquired by a larger company. An emergency came up in one of the company’s international offices, taking the vice president overseas. At the same time, the administrative assistant took FMLA leave, so suddenly the HR department was down to one. Security regulations stipulated that someone had to be at the front desk at all times during business hours. Since Rushforth couldn’t conduct orientation for new hires at the front desk, she had to find help in a hurry. She did it the fastest way she could think of—she brought in a temporary worker.

Increasingly, companies like Rushforth’s turn to contract workers to fill employment gaps. These gaps occur for many reasons. Employees leave temporarily for a newborn baby or a sabbatical. A project requires a programming expert. Seasonal events, such as tax preparation, require short-term staff to handle demand.

No matter how an employment gap occurs, hiring contractors offers several advantages over the standard hiring process associated with full-time workers.

It’s fast. Denis Du Bois, founder of Freelance Seattle, a non-profit organization that offers professional freelance workers a chance to vie for client projects, often hires contract workers when he needs to find specific skills for his consulting firm, P5 Group, on short notice. "With a regular employee, it might take a hiring manager days or weeks to get a job description approved internally in order to publicize it," Du Bois says. "Then the manager gets some responses back and filters them, and eventually in a week or two there might be some people to consider, and then the whole interviewing and hiring process takes place, which is lengthy in my experience."

"But when I hire a contractor for almost any skill, I can find someone in a day," he says. "And depending on their availability, the person could be starting in two or three days."

It’s flexible. This is true for both the company hiring the contractor and for the worker. The employer is free to set the terms of the contract, including hours and contract length, whereas state and federal laws take effect the moment an employee fills out the W2 paperwork. Though the IRS has guidelines for 1099 contractors, which must be followed to avoid the reclassification of a contractor as an employee, laws governing full-time employees are much stricter.

Many professionals and executives prefer this arrangement, too. Contracting gives skilled workers the freedom to pursue other interests (such as volunteer work, traveling, or caring for young children or aging parents) while maintaining their place in the professional world.

Carol Fishman Cohen, co-author of Back on the Career Track and co-founder of irelaunch.com, a site that helps people return to work after a career break, says contract work can help professionals reintegrate into the workforce. "Pursuing contract work is a great strategy for returning professionals because they get the opportunity to be evaluated based on a legitimate work sample. Both the employer and the potential employee can assess the working arrangement."

Since so many people are attracted to contract work, the range of services offered by contract workers is broader than ever before. The members who use Freelance Seattle’s services have a wide variety of career expertise, "from accounting to zoology," as DuBois says.

Low Commitment. Rushforth prefers to hire contractors rather than full-time workers when she’s uncertain about how long she’ll need them. "For short-term or medium-term projects, it’s easier to bring in a bunch of contractors for a limited time than it is to hire a bunch of people and then lay them off several months later," she says. "It’s also better for morale because the contractors know it’s going to come to an end, whereas a layoff usually results in hurt feelings on the part of those laid off and fear and uncertainty on the part of those who remain."

Low Cost. According to the U.S. Bureau of Labor Statistics, in September 2012, employee benefits made up more than 30 percent of an employer’s costs. Other estimates put that number closer to 40 percent. Obviously, hiring a person to work full-time is expensive. For contract workers, employers are not required to pay for Social Security, health care, insurance, or retirement benefits. Though contractors build some of these costs into their fees, the saved benefits, human resources paperwork, and office space can add up to significant savings.

How to Find a Contract Worker

The most obvious route to finding a temporary worker is a staffing agency. Rushforth often uses staffing agencies because it saves her the time of searching for a candidate herself, whether that’s for administrative assistants or software engineers. Staffing agencies can run the range from small local agencies to online freelance bidding sites (Elance and Guru) to national agencies (Volt, Adecco, Kelly Services and Manpower).

Another option is to use online job search engines. Monster, Indeed, and CareerBuilder all categorize jobs by type so that those who are searching for contract or temporary jobs can refine their searches to include only that type of work.

Referrals from current employees or other professional connections offer the advantage of pre-screening your prospective contract worker’s work habits and abilities. Many employers find contractors by checking with local colleges, alumni associations, and professional associations, or social media.

Former employees can also make good contract workers. Whether they left for a different job, a new baby, or retirement, former employees know the business and require much less training than a new employee. While they might not want to return to the responsibilities of a full-time job, many appreciate the opportunity to earn an income with more flexible terms.

Some services such as YourEncore, a network of retired business professionals, and Business Talent Group, a professional talent-matching service, orchestrate meetings between professional contract workers and the clients who need them, from marketing experts to leadership, from an interim CEO to a whole PR team. "We offer access to top business talent including former consultants and senior operators and senior executives," says Jody Miller of Business Talent Group. "We specialize in very high caliber professionals that have not previously been available for contract work."

Another option is to check local freelancing associations. Freelance Seattle has about 2,700 members, all of them independent contractors. Each client posting typically receives anywhere from 5 to 25 replies, and the client is free to respond to whichever bids he or she chooses.

The Future of Contract Work

Contract workers are a growing trend. While the number of people looking for temporary work goes up and down with employment cycles, overall, Du Bois believes contract work is trending upward both as a way for an individual worker to generate income and as a hiring strategy.

"I think people are becoming more comfortable with the idea," he says. "Workers like the flexibility contract work offers, and employers appreciate that hiring contractors immediately shortens the hiring process."

Employers are increasingly seeing the value of hiring contract workers. With so many professionals opting out of traditional employment, and so many advantages to hiring them, it’s easier to find contract workers to fill employment gaps than ever before.

Kaylie Astin is the founder of familyfriendlywork.org, a site that identifies solutions for balancing work and family.

[Worker Bees: Lane V. Erickson via Shutterstock]

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3 Comments

  • Jeannine

    Great post and I totally agree with your assessment of where contract work has grown over the past 4-5 years.

    The evolution of the Virtual Assistance industry and it's ultimate contractors who specialize in tasks from administrative support to accounting, creating and maintaining websites and social media, not to mention marketing and online business management, provides several other options for locating good talent.

    You wil find active RFP (Request for Proposal) systems at www.ivaa.org, www.valeague.com, and www.vanetworking.com. Each also has an extensive Directory where you can look for someone with the expertise, or location that makes the best sense for you. 

    Hope this helps!
    Jeannine Clontz
    www.IMVA-team.com

  • Chrysula

    I've lamented the lack of a sophisticated contractor market in the US for many years. My career both in the UK and Australia benefited from some amazing contract opportunities that leveraged my skills and expertise and took me to the next level faster than I could have on a traditional trajectory. It's great to see the US finally understanding this. The big obstacle in this country has always been health insurance. We'll see how that piece of this puzzle plays out in the next few years.