In Chapter 3 we discussed the pro’s and con’s of the Traditional Contractor Recruitment Model. Below, in Chapter 4, we take a look at what an efficient direct contractor recruitment model looks like, and the challenges faced with its implementation.
The Direct Contractor Recruitment Model
To recruit employees directly in an efficient manner a recruiting/hiring manager needs to have a number of processes and technologies in place. You need the skills and knowledge to source or market your jobs to the right people which may involve the use of referrals, career sites, CV databases, social networks, search marketing or job boards.
You need to be able to deal with a higher volume of direct applications which may involve technology to support the wider recruitment process such as an Applicant Tracking System (ATS). Interviewing, brand perception, candidate experience, these all take on extra importance when implementing a direct hiring strategy for permanent employees. When it comes to hiring contractors directly, these challenges become further complicated by the additional steps in the recruitment process.
For an efficient direct contractor recruitment model, you need to be able to take care of all aspects of the recruitment process, and encompass the operational needs of payroll, procurement, invoicing and timesheet management.
Earlier in this paper we mentioned that some companies do employ a direct recruitment strategy for contingent hires. Using a combination of sourcing, referrals and advertising they attract contractors directly and use a dedicated payroll company to process their pay.
However the challenging nature of developing a successful direct contractor recruitment model has resulted in a level of resistance amongst companies aligning their contractor and permanent strategies.
Below are some of the key obstacles employers will face when choosing to adopt a direct contractor recruitment model:
Challenges to a Direct Model:
- Sourcing & Attraction – Recruiting skilled contractors often requires access to niche networks.
- Increased Applications – Dealing with the inevitable increase in applications means additional recruitment technology such as an ATS may be required.
- Compliance – Employers cannot directly hire a contractor without potentially being liable for additional costs such as taxes, therefore to improve or increase compliance with HMRC, employers may prefer an agency to be an intermediary.
- Payment – Companies who attract contractors directly typically need to have payroll service provider or preferred agency in place to process contractors.
- Recruitment is Not Centralised – Line managers may be free to choose their own recruitment suppliers which can make implementing a holistic direct strategy difficult.
In the next chapter we will look at how employers can use technology to overcome the above obstacles and really maximise the benefits of a direct contractor recruitment model.