Contract Staffing: What It Is? Why Does It Matters?
Is your business growth dependent on project-based operations models?
Project-based growth has become a part of the economies of countries worldwide. Unlike conventional business models, where there is a huge need for permanent employees, project economies require manpower based on the skills needed during the duration of projects. Contractual staffing has become critical to meeting the needs of project economies.
Many businesses are opting for contract employment for enterprise-wide manpower needs to save costs and get rid of salary and benefits packages associated with permanent staffing. That has resulted in more chaos, opportunity loss, and unending talent gaps. The questions that confuse many employers are:
- What is contract/contractual staffing?
- When should it be used?
- How to go about contractual staffing?
- What benefits can you expect from contractual staffing?
Find answers to all these questions in this blog.
What Is Contractual Staffing?
Contract or contractual staffing is about hiring manpower on a contractual basis. The employment contract does not include a benefits package. Contractual employees are paid only for the hours they work. Incentives are usually performance-based. Contract staff are not entitled to health insurance, paid time off, vacation pay, and other benefits.
There are many types of contractual staffing services:
In-House Contractual Staffing
Some companies go for workforce models in which 40%-60% of the staff working on projects are hired on a contractual basis. The contract employees will be working on your premises and working alongside your permanent staff.
On-Site Contractual Staffing
For companies that need people working at client sites for product implementations and monitoring, on-site contractual staffing is often an ideal solution.
Remote Contractual Staffing
For many projects, it becomes difficult to meet skill needs locally. You can easily hire people from anywhere in your country or from offshore locations to meet talent needs. Contract-based staffing becomes the best hiring model to choose in such scenarios.
You can decide the duration of work hours for different team members based on the hours of work required on any number of projects.
Part-Time Contractual Staffing
Part-time resource hiring is popular for filling temp positions that require only 4-5 hours of work every day. It is widely used in the IT, healthcare, hospitality, retail, and tourism sectors.
Full-Time Contractual Staffing
The FTE contract hiring model has replaced many permanent positions in a project economy. For instance, you might need a core team of 15 engineers to supervise and lead multiple projects in your company, but you can choose contract staffing services to meet scalability needs or a temporary increase in customer orders.
Fixed Hours-Based Contractual Staffing
The most common examples of this contractual staffing model are in marketing, sales, web development, app development, and admin roles. When you need certain employees to work 10-20 hours a week, choosing fixed-hour contractual staffing is a better option.
There are different ways in which you can avail yourself of contract staffing services:
An agency provides you with the required staff to meet temp staffing needs. When you need on-demand staff to meet any peak in work volume, partnering with a contract staffing agency is a good option.
Offering contracts to freelancers to meet scheduled or unexpected hikes in project volume or customer orders is popular in many sectors.
When to Opt for Contractual Staffing?
Contract-based hiring is not a substitute for permanent staffing. For many roles, you cannot attract talent using contractual employment models. Here are some examples to help you understand when to go for contractual manpower hiring.
- Wrapping Projects Ahead Of Deadlines
- Meeting Peaks in Customer Orders Or Production Demands
- Controlling Attrition In Low-Skilled Teams
- Cutting Down Operations Costs
- Meeting Short-Term and Long-Term Temp Staffing Needs
- Managing Fluctuating Talent Needs For Different Business Lines
Why Does Contractual Staffing Matter? What Benefits Does it Provide?
The benefits of contractual staffing are undeniable and measurable. You can measure the positive impact on the bottom line. Contractual staffing has helped businesses grow faster and increase their operations capacities.
The specific benefits that one company enjoys might not be enjoyed by another. What you can expect from contract workforce models depends on what pain points your business wants to address.
Here is a list of the most common business benefits of using contract employment models.
1. Increased Business Capacites
Contractual staffing allows companies to efficiently scale up their operations and find talent to create new ventures and business lines with ease. You do not have to invest in permanent resources and find they are not suitable for all projects. You can find talent on demand for any project through project-based contractual staffing.
2. Operations Cost Reduction
Workforce models that cover contractual staffing are able to significantly reduce operations costs, making a huge positive impact on profitability and business performance. The best way to cut down manpower costs related to project-based talent acquisition needs is contractual staffing.
3. Access To A Large Pool of Talent
Leveraging contract workforce models opens your horizons to a 5X bigger pool of talent by taking the help of reputed agencies and vendors. The hiring model also makes it possible to get specialized talent through an agency on an on-demand basis. Your business can take on more projects or increase production capacities 2X when you can get the right manpower on time.
4. Flexibility and Scalability
A majority of companies choose contract workforce models to meet talent needs on time. There is greater flexibility in choosing candidates and acquiring any volume of manpower compared to permanent recruitment methods.
Partnering with an experienced contract staffing agency has helped businesses overcome scalability challenges effortlessly. It takes just one staffing request to get 10-100 people on board within the shortest possible time.
5. Effortlessly Meet On-Demand Staffing Needs
When you have a competent contract staffing agency partner, you can meet any talent need without difficulties. You do not have to spend a huge amount on attracting talent and interviewing 100s of people to fill 5-10 positions. Talent comes to your doors. You do not have to search for talent.
However complex the skill needs you have for launching new projects or redesigning existing products or solutions, a resourceful contractual staffing partner can provide the right professionals at any time.
6. Increase in HR and Administrative Efficiency
Managing hiring, onboarding, payroll, and employee management of contract staff takes half the time compared to conventional recruitment methods. When you partner with the agency, most of the HR and administration work is managed by the agency at a nominal fee. An excellent agency assures a 70%-80% increase in admin efficiency.
7. Ability To Decrease Talent Gaps
One of the most effective ways to reduce talent gaps across the enterprise is through contract staffing services.
Organizations across industries, like aviation, automation, banking, construction and facilities management, engineering and manufacturing, education, healthcare, hospitality, IT and software development, natural gas and energy, logistics, and telecommunication, report dramatic improvements in managing manpower challenges and talent gaps after using contractual staffing services.
8. Higher Productivity
Whether it is in the manufacturing industry, IT industry, retail sector, or supply chain sector, attrition rates keep increasing. Companies also bear the negative impact of frequent short staffing-related problems. Hiring contract staff helps in overcoming such issues. Instead of wasting time in backfilling roles every six months or annually, offer contractual positions that help retain staff and maintain the desired productivity levels.
9. Less Disputes
Employment disputes are common in many sectors. Companies promise higher pay and benefits when employees complete probation periods or perform well and meet goals. When employers are unable to fulfill their promises, conflicts arise that lower the morale of teams.
In contractual staffing, employers have to pay a higher amount of wages to compensate for the lack of many benefits. For skilled labor and a young workforce, the higher financial compensation offers many benefits. For employers, signed, pre-agreed contracts translate to zero conflicts arising from expectations about pay and benefits.
The list of benefits can go beyond 50 more points. To explore the unique business benefits for your company, you can reach out to a global contract staffing agency – Alliance International!
How To Choose A Contract Staffing Agency?
Here is a checklist that can help you identify a powerful partner for getting the best-qualified contract employees.
1. Manpower Outreach in your Industry
Unless the agency has access to large talent pools across your country or countries of operations, you cannot get qualified professionals every time you need temp staff.
2. Contract and Temp Staffing Experience For Specified Practice Areas
The agency needs to have manpower consultants who correctly and quickly understand job roles and how to meet skill needs.
3. Time To Hire
Your contract staffing agency partner must be able to fill positions quickly. To ensure fast hiring cycles, the agency must have excellent outreach strategies and virtual recruitment technologies.
4. Quality Per Hire
Your agency partner must know how to ensure best-fit candidate hiring, irrespective of the complexity of functions and hiring volume challenges. Check the recruiters’ knowledge of job roles, screening strategies, assessments, etc.
5. Cost Per Hire
One of the key advantages of contractual hiring is cost effectiveness. Find out how your staffing agency partner helps you save costs and how much savings they can enable.
6. End-To-End Support
You can improve your recruitment administrative and workforce management efficiency levels by 60%-90% when you get well-designed end-to-end support in managing contract recruitment.
7. Replacement Policy
People who serve you are not invincible. Unfortunate events can occur in their life. Any type of incident can lead to their quitting your services at inopportune moments. A good staffing agency partner must be able to offer fast replacements. Some agencies offer free replacement services if an employee hired through them departs within a short time after the joining date.
Contact workforce models have become popular across industries. If your business is exploring the opportunities and benefits to be achieved through this recruitment model, it is time to consult with a top staffing agency. Find a staffing agency that can offer you optimum benefits through contractual staffing services. Start with a small project to assess compatibility. You can then consider building a long-term business relationship that provides higher value.
Book a meeting with Alliance International for contract staffing to get manpower services support and make any project or venture highly successful.
Alliance International is a global manpower consultancy that helps businesses meet their manpower needs across projects and operations. We have powered the business growth of thousands of businesses through our comprehensive staffing services.
From talent sourcing to full recruitment process outsourcing, we have experience in managing permanent, temporary, and contract staffing in India for 5,000+ job types across 50+ industry segments.
Find out how your company can cross many growth milestones with a resourceful staffing partner like Alliance International! Contact us!
Q 1. Is it necessary to use contract employment models for offshore staffing?
Ans. Contractual hiring is widely used for offshore staffing when a business is not using outsourcing services. When your business wants to hire your own staff for ongoing projects offshore or build operations in offshore locations, contractual staffing is the best model to reduce recruitment risks.
Q 2. Can contractual staffing be used for highly specialized roles?
Ans. Yes, contractual staffing is getting wider acceptance for portfolio roles and complex jobs of shorter duration (a few months/years). It is used for hiring doctors, scientists, senior data scientists, lead engineers of projects, senior software engineers, sales managers, executive chefs, and interim top management roles. Reach out to Alliance International to get detailed information.
Q 3. Which is better: freelance contract staffing or agency staffing?
Ans. The advantages of agency staffing and freelance contracts differ.
Freelance contractual hiring is cost-effective. You pay the freelancers directly based on hourly rates or flat rates. When you go for agency staffing, you need to pay the agency not only for the man-hours of work provided by the contractual employees they provide but also a fee for the services they render.
Agency staffing can, however, provide other benefits: higher accountability, reliability, and time savings.
Q 4. Does your company offer contract staffing in India?
Ans. Alliance International provides contractual staffing services in India. We offer highly personalized recruitment services to ensure that our clients get the best-fit professionals for all the positions we fill.
Q 5. Is contractual staffing relevant for all industries?
Ans. Almost all industries use some form of contract employment model. Find out how your company can leverage this model to fuel growth by consulting with us.
Interested in finding out how Alliance can support you?
- Utilize the extensive network of the finest 3.5% talent
- Achieve hiring speeds multiplied by 10 and enjoy cost benefits of up to 40%
- Achieving a remarkable 70% success rate from initial candidate interview to final selection