Managers at Work
"In my department, there are a couple of permanent technical positions that need to be filled. We would like to hire one or two of the contractors we have here. They're highly qualified and do excellent work, but unfortunately they're not interested in the permanent jobs, even though they pay a little bit more. The way our contract works, these temp workers leave promptly at 5 every day, because if they stay, we incur additional costs. Our own employees work as long as they must to get the job done, which often means evenings at their desks.
"It's a common joke in my department that my staff wish they were contractors too: The pay is equivalent, the hours are better and, honestly, we need them for the foreseeable future, so there's little concern about job security. While it's a joke, it's really not very funny, and no one who works here as a regular employee thinks it is. How do we make permanent positions more attractive? I'd like to go to my management with this issue, but I know better than to raise an issue without having a solution in mind. The trouble is I don't know what to recommend we do about it. Any suggestions?"
Your question is an interesting one that speaks to the challenges of building a dedicated workforce in today's economy. Indeed, the number of temp or contract workers is on the rise. According to the American Staffing Association, the average daily number of temporary staffers working during the first quarter of this year was more than 2.5 million, up from 2.1 million during the similar period in 2009.
In a shaky economy, companies like temp or contract workers because they can pay fewer benefits, fire people more easily and try them out for positions. That flexibility has made the temp or contract workforce a more important part of a company's overall workforce strategy than it used to be.
And in many cases, today's workers see the benefits of such flexibility, says Jo Eaton, branch director at the Pittsford office of Comforce, a contingent staffing, information technology consulting and human resource outsourcing firm.
"It (contracting) has become popular by default. It's a great way for you to try out the company. If you find the place is a nuthouse, you can leave when the contract is up and tell employers that it was a short-term contract.
"If you try to leave a permanent job, then employers ask why you couldn't stick with the job."
David Call, senior vice president at the Rochester search firm Cochran, Cochran & Yale, agrees that employees appreciate the flexibility more than ever. "The whole contract thing has grown substantially, and the ability for people to pick and choose is very real," he says.
If a worker is already receiving benefits through a spouse, for example, that person might not find a permanent job attractive, Call says. "Once benefits come off the table, they say, 'What else am I really getting?'"
In this situation, the workers seem to believe they won't get much of anything by going permanent. So it is up to the company not only to analyze the benefits-tangible and intangible-of what it offers employees but to make sure they are communicated well enough to make them attractive.
As it analyzes this, a company should consider the hidden costs of relying so heavily on contract staff, Call says. While the company will meet its short-term goals of getting the work done, it won't have the competitive advantage of helping someone learn and develop on the job and become part of the team.
"I don't think there's any magic wand here," he says. "This company may need to be more rigorous upfront about hiring people who want to be permanent employees at the gate."
In this uncertain environment, many companies are being short-sighted about acquiring talent, Eaton says. "They want specific skill sets and they're not willing to train them, and as a result they're passing up a lot of good people."
"Some of my best placements occurred when I could tell the hiring manager that this person has only 25 percent of what you're asking for but you will love him or her. That is very different from hiring the person who has 15 different skills but can't get along with anyone."
This whole situation calls for a re-evaluation of the company's strategy on talent management, says Cindy Lubitz, founder and managing director of inTalent Consulting, a national human resources consulting firm.
Companies need to decide whether they want to adopt a "buy" or "build" strategy to acquire talent, she says, and that requires asking the big-picture questions: "What kind of company do we want to be? What messages are we sending? What are we going to do with this payroll, the biggest investment we have? What do we want to receive from it?"
Typically, companies with "build-oriented" cultures, including those in information technology, will spend time mapping skills, detailing competencies, developing a strategy and communicating regularly with employees to help them grow.
"If you're not intentional" about helping people plan and develop on their career paths, Lubitz asks, "why would they want to work for you?"
Managers at Work is a monthly column exploring the issues and challenges facing managers. Contact Kathleen Driscoll with questions or comments by phone at (585) 249-9295 or by email at firstname.lastname@example.org/5/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email email@example.com.