Ten years ago I would have agreed, but the statistics on this issue tell us that employers have been changing their perspective for the last decade already. The percent of the workforce that is contingent in the average organization has grown nearly three fold in just 10 years. In 1998 roughly 4.0% of all jobs were contingent in nature. Fast forward to 2008 and that percentage now stands at 11.2%. Keep in mind these are averages across all industries and do not include outsource labor which is also a form of contingent labor.

In many industries if we add contingent labor to outsource labor, the percentage of work being completed by non wage and salary workers is hovering between 40% and 60%.

? The press highlights the cost savings.
? The savings is reflected in the increased stock valuation.
? Overtime can be cheaper then a fulltime worker for a short period of time.
? Short term ROI is almost always positive.
? Wall Street has a way of pressuring management to get this ROI and increased stock valuation.

When it comes to a contingent workforce (CW) I agree with most of what you stated but again it felt one-sided. Here are some of the issues I?d like to point out:

? A CW is not superior when it comes to company loyalty. Being a FT employee of a company usually gives that worker a sense of pride. The CW knows they?re there for a short time and is usually motivate by money. Hopefully the challenges of the job motivate both types of worker.
? When there are layoffs it is easier to find both types of worker. If there are a lot of layoffs, you can find both types of worker at a cheaper salary too. In this situation the company would probably hire the FT employee at a cheaper salary, make them work overtime but since they are on salary they wouldn?t have to pay it, and not have to worry about the FT employee leaving because everyone is laying off. I?m not saying this is ethical or even pretty, but we all know this happens.
? Lower costs? I don?t know a single CW who gets paid less than a FT employee. The whole point of being a CW is to charge a high enough rate to cover your insurance and retirement costs while still making more than the FT employee. Company?s bring on a CW as hired guns to get them over a hurdle and then get rid of them. That?s why we charge so much.
? Pension? Who still gets a pension? These days it?s all 401k unless you?re a teacher or government employee?oh wait, you?re a teacher. Enough said.
? Redeployment works only if the jobs pay the same. No CW is going to take a rate cut to do an easier job and if the job is harder then the rate goes up.
? You don?t talk about volatile times and upturns. For a CW this is the best of times. Companies can?t find workers so they have to hire a CW and the rates go up fast. Do you remember the 90s? I switched over from FT employee to contractor in ?96 and my salary doubled. From then on my rate increased a minimum of 20% until 2000. Sure FT employees were getting bigger raises than usual but not 20%, that?s why they jumped ship.

All in all I agree with what you said but I like to have both sides of the coin presented.

Cheers,
Art Maurice

However, there are a couple of points I find myself questioning.

One of the very purposes for using contract resources is flexibility, and if managers are trying to shoot for certain ratios of contract-to-direct, this almost always slows down the hiring process, and speeding up the hiring process is one of the reasons some companies hire contract talent in the first place.

The other area that has made contract recruiting very frustrating the last few years is that many clients have a hopelessly ‘direct mentality’.

Those of you who do retained and contingency direct recruiting here have it right – passive candidates with PERFECT backgrounds are just about the only workers that many companies feel justified paying a fee for.

Very often clients insist that contract employees have exactly the same level of background as direct employees because they don’t want to take the ‘risk’ of starting a contractor who would be ineligible to go direct later.

Well, guess what – a candidate with such a ‘perfect’ background is probably going to be one of the 80 – 120 calls that the direct recruiters on THIS board are making today and they are going to find that candidate a job with a benefits package that would make your jaw drop.

No, if the ‘contingent’ workforce is going to be a significant factor in many areas, employers are going to have to completely change their mindset from ‘Who is the ‘perfect’ candidate to fill this role?’ to ‘Who can I STAND to fill this role for the next six months to a year and can get the work done?’