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    5 things you may not know about Contract Recruitment

    The use of skilled and experienced contract workers to manage sudden changes in demand and other project work is increasingly becoming a favourable option for employers. In fact it is an absolute necessity to hire certain skills as they simply don’t exist in the permanent side of the talent pool.

    Whether you are a small and fast-growing start-up or an established organization hiring contractors, it’s now a strategic choice to deliver the right change to your business, services to your customers and value to your shareholders.

    You could say it is en vogue but it is a lot more considered than that. Here we look at the top 5 advantages of using contract workers.

    1. Skills analysis

    Hiring contract staff enables Hiring Managers to observe the abilities of a worker over a period of time without having to make a long-term commitment. In this way, you avoid the risks of a probationary period you normally have with a new hire and you also save on cost-per-hire and the costs associated with making a bad hiring decision. It is quickly correctable too!

    2. Cultural & environmental fit

    For small to medium sized businesses contract workers can be a significantly cost-efficient way of ‘test-driving’ potential permanent staff and can be a win-win situation for both the candidate and your company. In the USA I believe it called a try-buy. Some contractors will not consider permanent positions under any conditions so be sure to open those discussions at the top of your relationship so everyone is on the same page.

    3. Screening

    Direct contract hiring has significant positive cost and time of hire implications for employers. Not only are recruitment costs kept to a minimum, the time spent screening and interviewing suitable candidates is also reduced. Simply put if the worker meets your requirements and has the qualifications for the role at hand, you can (in theory) hire them immediately. This eliminates the somewhat lengthy process often associated with permanent recruitment practices.

    4. Boost to business growth

    Hiring contract workers can also play a major part in adding to your bottom line. Regardless of whether you are undergoing a period of change or growth (or both), your company can benefit from the skills, knowledge and commercial experience that probably does not exist elsewhere in your business. Contract workers typically have an ability to add value immediately. They thrive on solving problems, can grasp a challenge and hit the ground running to deliver you an ROI sooner than you may have expected.

    5. Strategic flexibility

    Contract workers enable you to drive your business change safe in the knowledge that you can scale projects back or accelerate quicker should you need to without having to manage costly redundancy programmes, structural reorganisations and diminished morale. In the current climate of global economic uncertainty the ability to increase or decrease your workforce on demand is a key driver to business success. The Holy Grail used to be to attract the best talent as a permanent asset of the company. Take that risk now and you could be holding the costs on your payroll long after that employee stops adding any value. Through no fault of yours or theirs. Build a true contingent workforce of professional and highly skilled contractors and you build real agility into your business.

    When you bear in mind the points made above, perhaps it’s no surprise that in 2012, the number of new permanent jobs in the professional recruitment market fell, with research revealing a 2% drop in the number of available jobs over the last year. Meanwhile, the number of temporary placements increased by 4%. Ann Swain, Chief Executive at APSCo, the Association of Professional Staffing Companies said “We’re seeing a very continuous trend in the professional recruitment market towards the hiring of temporary staff in preference to permanent staff. Businesses still don’t have the confidence to make permanent hires when they can use temporary staff instead.

    “Whilst an increase in temporary placements may not appear good news as permanent hires fall, the use of contract workers is offering a great deal of flexibility to both employers and employees.”

    To find out more about how the jobs market changed over the past 12 months, make sure you take a look at Professional jobs market continues to replace permanent jobs with contractors by APSCo.

    You may be surprised at exactly how many UK businesses are turning to contractors…

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    So you have streamlined your recruitment processes have you?

    It isn’t easy being an employer. Often over-stretched and under-resourced, HR practitioners are increasingly faced with the dual challenge of finding the best talent for their organisations and maintaining a consistent employer branding while keeping their recruitment costs to a minimum. No easy task. So how can organisations reduce their recruiting costs without sacrificing quality?

    Despite the implementation of widespread streamlining measures, recruitment costs in the UK remain one of the highest in Europe and the reasons for this are numerous:

    1) The growing proliferation of media available
    2) Scattering of talent across a multitude of internet destinations
    3) Continued dependence on recruitment agencies to procure the best talent

    Indeed, it is perhaps the latter point which continues to prove the greatest expense for many employers. In the UK, the average fee recruitment agencies charge their clients for each successful placement is 16% of the salary being offered. Which, based on a Contractor rate of £300 per day, means that recruitment agencies stand to make as much as £960 in commission each month or over £11,500 per annum.

    Take the following scenario: If you are an organisation which relies on Contractors to manage existing and anticipated workloads on a regular basis, you will could hire up to 5 contractors during the course of a given 12 months. The costs of filling these places using a recruitment agency could see your recruitment costs escalate to £4800 per month, or almost £58,000 each year.

    Of course, it is possible to negotiate a lower commission rate with the recruitment agency, but while this may positively affect your recruitment costs in theory it will in fact have a detrimental impact on your bottom line. In reality, money talks and most agencies will simply channel their best candidates to where they will earn the highest fees – enabling those employers to cherry-pick the best talent available and leaving you with the best of the rest. This will invariably prove more costly in the long-term, with the cost of poor hiring decisions costing UK Plc some £40bn each year. So what can you do?

    Reduce the time to hire

    A recent survey found that 4 out of 5 candidates lose interest in a job if the recruitment process takes longer than anticipated. Aim to keep the process to a maximum of one month – the best talent will not hang around for long and if you don’t act quickly your competition probably will.

    Create the right job description

    Give candidates the opportunity to ‘sell’ themselves to you by providing them with enough information about the requirements and expectations of the role. Too little information and poorly written job specs will result in poor quality applications and increased recruitment costs.

    Effective employee referral schemes

    These can be higher effective in keeping your costs to a minimum while attracting a suitable volume of applications. However, a word of caution – if the value of the referral fee is too high you will be inundated with a mass of inappropriate applications with employees encouraging lots of their contacts to apply, while keeping the fee to low will have the opposite effect with few CV’s received which will add to your costs.

    Better interviews

    Candidates are expected to prepare thoroughly for interviews and they rightly expect their interviewers to do likewise. Yet poorly prepared interviewers are commonplace. Ensure all hiring managers are properly trained in effective interview technique – the better the ‘candidate experience’ the better your chances of securing the best talent for your business.

    Implement a direct recruitment model

    By far the most effective way employers can reduce their recruitment overheads is by implementing a direct recruitment model – or put another way, a direct candidate attraction process. In an era of economic uncertainty this is fast-becoming the preferred recruitment option for employers, with systems such as that offered by Elevate already saving organisations £000s each year.

    For example, the average cost per hire using Elevate’s direct recruitment platform is just 4% which equates to as little as £240 per month (less than £2,900 a year) – £720 per month less than with a recruitment agency. When we compare these costs over a typical twelve month period, an employer hiring up to 5 Contractors over the course of a year using Elevate’s direct recruitment model could save as much as £44,000.

    Adding those kinds of saving to the bottom line is a good news story that you should all want to deliver…..

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    The Fragmenting Workforce – Part Two

    The rise in contingent  working – from the  Hirers’ perspective

    The previous blog article covered sentiments leaning towards increased use of contingent labour and this was highlighted in the REC’s 2011 Working Paper ‘Talent Acquisition in Turbulent Times’ and by other sources. Of note, Staffing Industry Analysts’ (SIA – http://www.staffingindustry.com/row/) 2012 Contingent Workforce Buyers Survey, published in October, European buyers predict their organisation’s contingent workforce will be a median 17% in two years. This is up 2 percentage points from 2011 and 6 percentage points from 2010.

    If the US is to form a precedent for the UK, Staffing Industry Analysts predicts the US contingent workforce will double in size to 50% by 2020. Some organisations within the IT sector are already close to this figure. To enable organisations to start to even think about operating contingent working on such a scale, the structure and infrastructure of the recruitment process has to be fundamentally reviewed. This structural review also extends, for many, across into how employee status is viewed. For Barry Hoffman at Computacenter, “there is no such thing as permanent employment. The interview process extends across at least the first twelve months”. If he has a concern, it is that those seeking employment have an outdated attitude to risk. “Their attitudes towards job security just haven’t moved in line with the market.”

    The rise in contingent working – from the candidates’ perspective

    Randstad’s Navigator Report, http://www.randstad.co.uk/the-navigator-2012/, published early in 2012 noted the words of Andreas Ghosh, Personnel and Development Director for London Borough of Lewisham (and Policy Lead for Workforce Strategy at the Public Sector People Managers’ Association). For Ghosh, the shift has been clear: “The world of work has changed… The intelligent individual is in control of his or her own market, while the rest still require patronage.”

    Randstad’s own candidate research echoed Ghosh’s views. Nearly half of the 2000 candidates surveyed, who were in permanent positions, considered freelancing when they last looked for work. Slightly more say they would consider this option the next time round.

    Of those working in contingent roles, findings relating to choice of doing so were consistent with official available data and other research into candidate sentiment.

    One big change therefore is that the layers of the extended enterprise – all those who work on behalf of, rather than necessarily for an organisation – are ever increasing:

    There are many HR considerations that come into play from such a move, not least for the process of recruitment. An examination of the increasing use of three key areas of this extended enterprise may point to some of the changes to this process that may, by necessity, start to play out. We are seeing new technologies being developed to support these activities as we know only too well here at Elevate!

    We’re sure you can expect more activity in this arena (and from us) very soon.

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    Let the Platform do the Work

    Here’s a scenario for you. Imagine that you need a freelancer. Your previous method of finding such a one would probably have been to get in touch with the two or three recruiters who hadn’t nauseated you by making your life miserable with endless – and no doubt fatuous – phone calls, giving them the requirement and then waiting for them to come back to you with a shortlist of possible candidates after a furious behind-the-scenes race in which they would have competed with each other to contact available, and unavailable, talent who might fit the bill. More often than not they will each have contacted the same candidates about your role. If they are the first in then that candidate when presented to you will be a paragon of virtue, if not then they will do their level best to undermine his or her candidacy.

    Now imagine you have implemented Elevate, a powerful tool, which does much the same thing as your recruiters. The trouble is perhaps, that not being sure of this you are unwilling to commit yourself entirely to an untried piece of technology. So you not only place your requirement on the Elevate platform but you fit up with belt and braces and tell your ardent recruiters about your needs as well.

    Let me let you into a secret. If it comes to a straight race between recruiters and Elevate, then nine times out of ten Elevate loses. Shock and horror, why is this?

    Well folks, Elevate works differently to recruiters for a start. Elevate does not phone you during your working day, breaking into whatever you were doing and asking you for an immediate commitment to your CV being presented to a client. Elevate notifies you by email and, if you are busy, will let you complete what you were doing and get back to it later.

    But Elevate is thorough, and Elevate has access to special interest groups, forums, data and people that most recruiters would kill for. We can reach parts of the internet that recruitment consultants can’t. Simple – and employers need to play to this strength.

    Think of Elevate if you will as not being dissimilar in concept to Google, albeit working in a vastly different way. Everybody knows that if you put an open web site on to the world wide web, at some point the bots and spiders that labour tirelessly to gather information for Google will come across it and make it available via the world’s most commonly used search engine.

    The way that Elevate works is not so different. When you put your requirement on to the platform, the first thing it does is to look and see if there are available contractors on the Elevate database. If there are, all well and good and Elevate lets them know that there is a job that could be of interest to them. At the same time, Elevate will access the various forums and special interest groups that have chosen to open their doors to Elevate in order that their members may deal directly with potential employers. Again, Elevate informs chosen candidates know that they can apply for your requirement. Recruiters do not have access to this. If they did they would torment and hassle the group members to the point that they would resign from the forum. Elevate works in a more refined and innovative way.

    Furthermore, Elevate may go further and, using the access that it has to the best recruitment advertising sites, it may advertise your position – with your corporate logo displayed – ensuring that candidates know that this is a direct contract with you rather than work offered via a recruiter.

    Now because Elevate is not hitting on the candidates with phone calls, repeated emails and unending text messages, it may take a little time for it to work its magic, but bear with it, give it time and nine times out of ten it will do what recruiters fail to do. It will deliver candidates who have chosen of their own accord to come and talk to you about the work you need to get done.

    Ideally, we would like to see our clients give Elevate a week in which to beat the bushes for suitable candidates. If you really can’t bear to wait that long then give it at least 72 hours. After all, what is a candidate to make of events if he or she gets an email from Elevate letting them know about your opportunity, only to have a recruiter phone ten minutes later about the same job? In that circumstance you are undermining your own tool.

    Best of all, Elevate does not give up. We recently had a client who had been trying to recruit a rare and particular skill for some weeks, using all of their usual sources. Perhaps somewhat cynically, they chose to give Elevate the challenge of finding this needle in a haystack as the first assignment. Imagine their surprise when Elevate actually delivered the person they needed. Not surprising to us, for given our past experience as recruiters we can well understand that a recruiter tends to work on the jobs that are likely to get filled earliest. Spending time hunting unicorns is not going to put food on the table or shoes on the children. Elevate doesn’t care. It just gets on with the job however long it may take.

    So the moral of the story is: give Elevate a head start. We are not saying that it will fill EVERY job, but you will be surprised at how often you get a shortlist of candidates whose skills and experience will match the vacancy you urgently need to fill. Candidates who are engaged with your brand and have enjoyed a good experience thus far.

    As I said at the top of the article…let the platform do the work.

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    Contingent Workforce: A Critical Talent Segment

    The use of contingent workers has increased dramatically over the past decade as businesses have struggled with rising labour costs and the need for a workforce that can quickly adapt to market conditions. Contingent workers are people who provide services to an organisation but are not paid on the company payroll. Think contractors, consultants, temps and outsourcers…

    Even in today’s tight job market, there is a shortage of workers with critical skill sets. This has resulted in a steady, year-over-year growth in the size and cost of a larger contingent workforce. As the baby boomer generation is starting to retire, companies are bridging the critical skills gap with a more contingent workforce. Some large companies have estimated that up to 30 percent of their procurement spend is focused on contingent workers.

    Though the contingent workforce is growing in importance, many organisations may not be skilled at managing this workforce segment effectively. Major challenges include the lack of an integrated workforce management strategy, ad hoc managerial behaviour, poor data management, inadequate technology and poor recruiting practices

    What’s driving this trend?

    1) Workforce Demographics: Demographic patterns have a direct impact on the available workforce and have created an imbalance between the supply and demand in critical workforce segments.

    2) Headcount Reductions: Rising labour costs associated with full-time employees have put steady pressure on businesses’ bottom line. Greater use of contingent workers is a strategy used to ease some of this pressure.

    3) Value-add strategy: Organisations increasingly need to scale up and down and contingent workers can be a solution to enable organisations to adjust with the changing market conditions.

    4) Cost management: The increasing ratio of contingent workers in the total workforce – and their growing importance in delivering business results – is driving more focus on managing suppliers of the contingent workforce.

    Practical implications

    Companies that understand the issues associated with contractors and manage them well can benefit from improved operational performance, lower labour costs, smarter staffing decisions, and stronger HR alignment with business objectives.

    Conversely, poor management of contingent workers can negate many of the potential benefits. These risks include legal and regulatory challenges when governments pursue companies that misclassify contingent workers, which can lead to significant penalties. A lack of transparency around a company’s contingent workforce can also limit a company’s ability to make fact-based decisions about workforce spend.

    In addition, as the use of contingent workers spreads, companies can face competitive risk from the loss of trade secrets and intellectual property. When these workers support business-critical functions and interact with customers, the lines between employees and the contingent workforce blur.

    Managing these risks requires an enterprise-wide approach based on broad collaboration across the company, with programs targeted to specific business audiences. Leading businesses today are adopting these kinds of broad strategies. They generally involve creating standardised, cross-functional business processes, policies, and roles across business units and regions, supported, where possible, by a single information technology platform. This approach can, and is designed to, create transparency in the spend and management of the contingent workforce.

    At Elevate, we focus on the recruiting and management of the contingent workforce and see huge opportunities in improving how you recruit, the cost of recruiting and the management of the ongoing contingent workforce.