Many contract recruiters wish they had taken that internal recruiting position offered to them two or three years ago. As in every recession, being an internal employee is viewed with envy. It seems only logical that as layoffs and cutbacks greatly reduce the number of contract recruiters, the interest in being a regular employee rises. The lure of a regular paycheck, benefits, and the sense (although false) of security score high.
But I am not so sure that a contract recruiter should want to be an employee. While the functions that HR performs may be essential, they don’t necessarily have to be performed by an employee. Organizations are realizing that they have more employees than they need — and very often in the wrong place. Why should any organization spend salary, development, and retention dollars on employees who do not generate new products or revenue? What does a recruiter contribute that an contractor could not? There are already hundreds of companies that have replaced their recruiting team with contractors and third-party recruiters and have had success. Unfortunately, most HR professionals are convinced that their organization could not function without them as employees, but I think they are wrong.
Given what is happening in business strategy, HR is about to undergo the biggest reduction in workforce it has ever seen.
In an article written just a few days ago, Cowan analyst Peter Goldmacher says “. . . large companies will outsource an increasing amount of HR functions. . .” and raised his predictions for Kenexa stock. The Human Resource Outsourcing Association’s membership is growing rapidly, and more organizations are finding that they can successfully outsource large portions of the HR function and enjoy good service with lower costs. Over the next decade, outsourcing and automation will accelerate and other administrative functions such as IT, finance, and legal will also be outsourced. I am fairly certain that over the next decade, self-service, automation, and outsourced services will replace the majority of HR jobs within corporations.
That puts any independent professional in a good position. Outsourcing firms as well as corporations will be looking for people willing to work on fixed contracts with performance clauses. This will panic many HR professionals, but recruiters are in a good place. Except for the ATS, they are able to perform with little other internal support. Sure it will require recruiters to develop marketing skills, invest in some branding, and learn to negotiate, but it will pay back with many dividends.
Here are seven reasons that being a contract recruiter is better than being an internal employee.
Reason #1: Job Security. There is no job security working as an employee. I think anyone in a job that does not generate revenue, invent new products or services, or interact with customers in a strategic way is in jeopardy of being laid off in the next year or so, as I indicated above. There is no better security than that you create for yourself. If you build the networks, skills and put aside the resources to weather the downtimes, you will find much greater security in working for yourself.
Reason #2: You Do More and Do it Better. As an entrepreneurial recruiter, you will have to develop more cost-effective, and efficient recruiting methods, lower costs, and improve customer satisfaction. These have been elusive goals for corporate recruiters, who struggle with internal bureaucracy, an HR leadership team that does not understand or appreciate what a recruiting function needs to be successful, and few dollars for investment. There is almost no benefit to a corporate recruiter in being more efficient or cost effective. If they try to do so, they will lose budget dollars and staff. Contract recruiters can make prompt decisions and invest where they need to and therefore better serve their customers, and reap the greater profits.
Reason #3: You get more respect. As an independent professional you automatically get more respect from clients. If your demeanor and attitude are also professional, you will be listened to and hiring managers will take your advice. Contrary to the experience of many corporate recruiters, managers will solicit your opinions and market knowledge. The expert contract recruiter understands the labor market and can explain it to hiring managers. They can give examples of what other clients are doing and can apply the best practices of many. These are benefits that are hard for a corporate recruiter to offer.
Reason #4: You are rewarded for your performance. No one keeps a contract recruiter because they are nice people or because they have been loyal. Contract recruiters are rewarded for performing well — no matter the circumstances. You are always paid the amount you convince and show managers that you are worth. That’s why internal recruiters are often jealous of contract recruiters: they are only paid according to some general HR pay scale that has very little or nothing to be with how well they perform.
Reason #5: You can have more fun and be more flexible. Being on your own is scary at times, but it has its rewards. You get to take on the work that excites you and interests you. You can say no. You work where you want, you work your own hours, and you take vacations when they suit you. You can adjust your work load to match your energy levels, abilities, and motivation. This flexibility and freedom to enter new markets can be enough reason to go independent.
Reason #6: Candidates and employers will trust you more. Independence is associated with neutrality. Providing you give honest opinions and represent both employers and candidates fairly, you will gain a reputation as someone who fairly assesses candidates and employers. Candidates value that above almost anything else, in my experience. If you can let a candidate know that they are not a good fit for a particular employer, both appreciate it. Hiring managers often turn to outside recruiters when they wish to keep searches private and when they are seeking the widest reach and most objectivity. These are powerful assets for a contract recruiter.
Reason #7: You are cheaper. No matter what your hourly rate, assuming it is market competitive, you cost an organization less than the loaded salary of an employee. You also do not require internal promotions and you pay for your own training. There are no pension requirements or expectations of continued employment.
It is challenging to learn new behaviors. Working for corporations is a very established way of behavior that takes time to “unlearn.” Over the past decade the number of independent workers has grown faster than any other type and lots of people who were laid off in past recessions have learned to love being independent.
You may be asking what the difference is between a contract recruiter and a head hunter? It’s really about how you work and market yourself. Contract recruiters usually work for a particular corporation or other recruiting firm and do not own their own business. It’s a fine line and you may decide to become a third-party recruiter. Either way, you maintain your independence.
The time you spend looking for a new job can probably be better used to develop the marketing, selling, and negotiating skills that you will need as an independent. Hopefully these are challenges that you are willing to face. Even though you must face the consequences of your choices, nothing is better than being free to make those choices.
