News is surrounding us of tech layoffs and a fear of recession. And for good reason – a recession is a challenging time for any business, especially for technology hiring managers who need to balance the demand for project-based work with the uncertainty of the market. Hiring full-time employees can be risky and costly in a recession, as they require more investment, commitment and legal obligations from your business.
That’s why right now, many businesses are turning to a contingent workforce (consultants or contractors) as a smart and flexible way to adapt to the uncertain market, changing needs and to reduce costs. A contingent worker is a temporary staff member who works for a defined period of time (usually 12 months or less) on specific projects or tasks. They are hired through staffing or consulting partners that handle their payroll, taxes, benefits and compliance.
A contingent workforce can offer your business several advantages:
- Reduced cost: Consultants or contractors typically cost less than full-time employees on an annualized basis, as they are only paid for the hours they work and are not given benefits such as health insurance, retirement plans or paid leave through your companies’ resources. You can also save on overhead costs such as office space and training. At Hollstadt, the majority of our consultants are W-2 employees and all benefits, training, and resources are provided through us – making it a cost-effective solution for our clients – and consultants get access to the employment benefits and services they desire.
- Decreased risk: When engaging a contingent worker, your company doesn’t need to worry about unemployment insurance, severance pay or wrongful termination lawsuits. This means you can easily adjust their contracts if your business needs change or if their performance is unsatisfactory. Additionally, Hollstadt works with our clients to help communicate these changes directly with the consultant and find backfills quickly if the talent isn’t meeting needs.
- Increased flexibility: Consultants or contractors allow you to scale up or down your workforce according to your project needs and budget constraints. By partnering with a firm like Hollstadt, we can help you hire quickly and easily with access to our large database of qualified candidates with diverse skills and experience. You can also adjust their hours, roles and responsibilities as needed without affecting their morale or loyalty.
Now sure, these are the everyday benefits of a contingent workforce, but how can you make the most of consultants/contractors during market uncertainty? Here are some unconventional approaches that can help you leverage their potential:
- Use them for innovation: Consultants or contractors can bring fresh perspectives, ideas and solutions to your business challenges. They can help you explore new opportunities, test new products or services, or improve existing processes or systems. You can also use them to fill skill gaps in your team or learn new technologies or best practices from them.
- Use them for their expertise: Many of our clients have had great success in bringing in a consultant for a specific subject matter, technology or skill set that is needed for a certain length of time or project that the organization, department or project teams does not have. By tapping into their knowledge, they can be great additions to the team and can even help train other members for longer term expertise in that particular area.
- Use them for collaboration: Contingent workers can enhance your team’s productivity, creativity and diversity by working alongside your full-time employees on cross-functional projects. A partnership with Hollstadt can also help you expand your network and reach new customers, partners or suppliers by leveraging our contacts, connections and experiences.
- Use them for retention: Consultants or contractors can be a valuable source of talent for your future hiring needs. By working with them closely on projects, you can evaluate their fit with your culture, values and expectations. You can also build trust and rapport with them by providing feedback, recognition and incentives. If you are impressed by their performance and potential, Hollstadt even has options for them to convert into permanent positions when the economy recovers, or the timing is right.
Contingent workers are not just a short-term solution for surviving a recession or the market uncertainty we are currently facing; they are also a long-term strategy for thriving in any economy. By hiring consultants or contractors wisely and strategically, you can gain competitive advantage, reduce costs, minimize risks, increase flexibility, and prepare for growth. Interested in hearing more about how a Hollstadt consultant can help? Reach out today – hello@hollstadt.com