COVID-19 has indeed left the entire economy paralysed and in these tough times, when companies are facing a cash crunch, cost-cutting has become inevitable. Talking about the last few months, organisation’s are really down on their luck, running low on cash and being hit hard on the revenues. So in such adversity, management could think of no other solution but to exercise grossly unfair practices such as pay-cut, furloughing, retrenchment and laying-off.
But as the toughest of storms run out of the rain, so are we optimistically looking forward to a significant recovery of demand in the market. Contract Staffing is expected to be the most sought-after alternatives an organisation can opt for post-pandemic referring to the sequel that followed after the Global Financial Crisis back in 2008.
What is Contract Staffing?
Contract Staffing refers to the temporary hiring of staff through a contractual agreement for a certain period on the basis of the project they are hired for. These recruitments are done to fulfil immediate requirements for certain positions in the company, seeking special skillsets for the ongoing projects. It is a three-way relationship viz. :
? The company providing the work,
? The recruiting firm handling the contracts with the company and paying the temporary workers and
? The contract worker extending its service to the company for the duration as per mentioned in the contract.
Staffing is a mammoth undertaking, which entails a list of long-drawn-out activities starting with scanning of profiles, shortlisting a few, calling them up for interviews, selecting the well-suited, onboarding formalities and so on. It is a laborious and big-budget affair to deal with, moreover, it demands a considerable amount of know-how by the performing team. HR managers who are already swamped with more of administrative HR functions fail to concentrate more on the other strategic functions vital for an organisation’s overall success, such as working hand-in-hand with the COE’s to foresee staffing needs, streamlining succession planning, ensuring proactive support from the other HR wheelhouses, etc.
Evolving market conditions, swift technology shifts and heightened competition have taught companies to have their skilled staff ready in case of any unanticipated calls such that you don’t adrift in the battle of front runners. Therefore, deploying a subcontractor is discerned to be an out-an-out remedy to do away with the pointless hassles in the modern-day society. Benefits of having a subcontractor for staffing are as under:
Helps in maintaining the churn rates.
? Cost-cutting and better utilisation:
Help reduce the company’s bench strength and overall spend to a considerable degree. Though initially, this might appear as a business paid over the odds, slowly but surely it manifests to cut back on the extraneous expenditures that come with hiring, training and maintaining of bench employees.
? Helps enhance the stock market value:
With a slash on the hiring, training and maintenance costs, temporary staffing can be shown as a consultancy fee in the company’s account books with
which you can limit your payroll and hence improve your revenue per employee ratio.
? Exposure to competent employees:
A contract employee performing extra-ordinarily might even be given a chance to work full time. Therefore, pinning their hopes on such an opportunity, individuals keep striving hard to perform their best voluntarily, which is why you can rarely expect underperformance whilst contract staffing.
So, next time when you are not sure of hiring directly, simply use the “try before you buy” strategy and place them on a contract-to-direct basis.
? Avoid hiring freezes from affecting your business:
During these unfortunate times, you still have deadlines to meet and projects to complete. So, by using your company’s operating budget you can have your contract workers address all your client’s needs. Hence, it is a win-win situation for both.
? Ascertain consistent cash flow and ensure flexibility:
You can make a substantial amount of money by adding contracting to your business model.
But how? You will be able to earn money every hour while contracting and even when you decide to take a day off because the contractor-workers are working for you. Moreover, you can enjoy the bliss of week-long cash flow since most of the clients pay their invoices weekly.