By Jen Boyer, Advisory Client Executive, CAI
Companies are re-imagining all aspects of business, especially around managing resources - a virtual workforce and risk management being top of mind. The trend of Contract Labor, coined the "gig economy", continues to rise. According to a recent article in Forbes, "36% of American adults engage in some sort of gig work. And labor trends at enterprise companies suggest that the gig economy has a lot of room to expand." Naturally, with the overall trend on an upswing, using contract labor in IT is also increasing.
Companies are using a mix of contract laborers and employees as a strategy to stay agile - having the ability to pivot quickly to scale up, or down as needed. On-boarding and off-boarding contractors requires less paperwork and red tape than full time employees. Hourly contractor rates may be higher than an individual employee's cost, but the cost is worth the long-term benefits - lower risk, less commitment from the business, and the flexibility to change course at a fast pace.
The question is, how can you get the best contract IT talent when you need it without overburdening your already overworked hiring managers?
In a typical Staff Augmentation model, hiring managers build relationships with vendors, sending requirements for contractors as needed. Managers control the vendor relationships and work 1:1 with them to become true partners, understanding the business and technology. Visibility into overall demand and the contractor pool across the enterprise can be lost in this model. Vendor performance is generally subjective and not measured against Service-Level Agreements (SLAs).
In a Vendor Managed Staffing (VMS) model, the primary vendor running the program manages the relationships with the sub-vendors and becomes the centralized point of control for all contractor requirements. Vendor scorecards measure performance. Visibility increases for demand and spend across the organization to improve time management and consolidate billing. Rates are pre-negotiated with sub-vendors paying for the system. Lowering contingent worker costs is often a driver for this model. Typically, the primary vendor point of contact is less knowledgeable in IT and the business to vet candidates for managers is greatly diminished. Managers have less control over the vendor relationships and are often prohibited from working 1:1.
In both models, managers are responsible to comb through resumes, schedule and conduct interviews, vet candidates and coordinate all aspects of on-boarding and training. Any future performance reviews and contractor engagement are performed solely by the manager at their discretion. The extra work associated with this part of the process can be time consuming (not to mention expensive) and may not be the best use of your leaders' time and energy. Generally, once the contractor is on-boarded, they often have little to no contact with their vendors outside of payment for hours worked.
CAI's Engagement Managers partner with hiring managers in interviewing, on-boarding, and reviews, sharing risk and measuring results on a scorecard. For example, CAI manages SLAs with a standard of hiring 3 qualified candidates in 5 days, 80% of the time. Our local, national, and global recruiting engines find the best match technically and culturally for your organization. We provide the visibility you need across the organization and consolidate time and billing. The framework is designed to deliver high quality results, fast, while reducing the burden on hiring managers.
Utilizing contractors as your own internal talent pool for future full-time employee hires is a cost-effective succession planning strategy. With the right pre-screening, ongoing communication, and regular performance and talent reviews, staffing with contractor resources reduces risk of turnover or unforeseen performance challenges. You already know their core capabilities, and performance level - plus they are engaged with the company from time of hire, so no ramp-up time is needed. Not all contractors want to be full-time employees, but with the right model, the chances of conversion are significantly increased. Bring the best of Staff Augmentation and VMS together with Flexible Contract Staffing.
New ways of working and technology innovations are becoming mainstream every day...it's time for a fresh idea for Contract Labor models.