Rising Popularity of Contracting

  By Top Echelon  |    Tuesday June 27, 2012

Category: Recruiting


When it comes to trends in the executive recruiting industry, there’s one trend that seems to become more and more popular each year. That trend is contracting staffing. Our statistics show that for the past 12 years, the number of professional contractors has steadily increased. And as we begin 2005, that trend does not appear to be reversing itself anytime soon.

The unique aspect about contracting is that it has been flourishing no matter what the state of the economy. During the good times, when companies are hiring to keep up with demand, contractors provide an excellent way to complete projects, meet deadlines, fill the gaps, and get work done that needs to be done without hiring a full-time employee. During the down economic times, companies that can’t hire perm (direct) candidates often hire contractors because they still have projects and deadlines. Plus, you can hire a contractor with a specific skill-set instead of hiring a perm worker who will have to be laid-off later. And we all know that layoffs generate negative morale issues and negative publicity for any company. Contract staffing also offers a very viable alternative when a company has a budget constraint because contractors come out of a different budget. So in essence, contracting is certainly not as affected by economic conditions as the perm side of the business is. It’s always in demand, and that demand has been steadily increasing during the last 10 to 15 years.

If you only work the perm side of the business, you might be asking yourself, "Why is contracting so popular?" The answer lies in the fact that it is a "win-win-win" situation for everybody involved: the recruiter, the company, and the candidate.

The Benefits for Companies and Candidates

In order for a recruiter to be able to “sell” contracting to companies and candidates, it is beneficial to know more about the advantages it holds for them. Below is just a sampling of the common advantages of contract staffing for companies.

Company Advantages

  • Increase staffing flexibility
  • Outsource accounting issues (payroll, timesheets, invoicing)
  • Outsource human resource issues (workers’ comp., benefits, etc.)
  • Immediate availability of skill-set
  • Option of temp-to-perm conversions (try-before-you-buy)
  • Reduction of unemployment exposure
  • Maintain budget controls
  • Eliminate pre-hire costs
  • Avoid office politics

Now let’s consider the candidates. There are candidates who prefer to work contracting jobs as opposed to perm positions because of the flexibility and freedom that they offer. The allure that contracting holds for candidates should not be underestimated. When you are talking with candidates, you should always ask them if they are interested in contract staffing. Below are some of the advantages that contracting holds for candidates.

Candidate Advantages

  • Higher earning potential
  • Flexible lifestyle
  • Opportunity to travel
  • Variety in work scope
  • Enhance resume (acquire new skills)
  • Weekly paycheck
  • Full benefit options
  • Get your foot in the door (desire a perm job at the company)

Contracting’s Popularity with Recruiters

The fact that contracting is popular with companies and candidates automatically makes it popular with recruiters. But there’s also another important reason why recruiters like contracting and it can be summed up in two words: steady income!

Contracting provides the opportunity for recruiters to earn steady, predictable income each and every month. Those who strictly work the perm side of the business are normally not able to describe their income as predictable. So imagine if you were able to count on a steady stream of revenue, in addition to what you might bring in with permanent placements. Think of the piece of mind you would enjoy. Many recruiters are under the mistaken belief that they can’t do both perm and contract at the same time. But the reality is that there are countless recruiters who are doing both perm and contract staffing, and they’re making a ton of money by being a sole-source provider.

Learn About Contracting - FREE Contract Training Kit

A lot of permanent placement recruiters hesitate to do contracting because they fear it is extremely difficult and cumbersome. Granted, there are a lot of administrative and financial issues that need to be addressed with every contract placement. But recruiters have the option to use a back-office service to handle these issues while they (the recruiter) focus on matching contract candidates and job orders. Top Echelon Contracting offers a full-service back-office that handles all the administrative and financial issues, plus they do business in 47 states. Top Echelon is currently offering a free Contract Training Kit, which is available at www.TopEchelon.com/Contracting. This kit was written with permanent placement recruiters in mind. It will explain the ins and outs of contract staffing and also explain the back-office services that Top Echelon Contracting can provide.

Contacting + Perm = Success

There is plenty of evidence to suggest that the best way to maximize your profits and your business’s potential is to add contract staffing to your business model. Eight of the top 10 producers in Top Echelon Network make both contracting placements and permanent placements. And during the past 12 months, the top producer in Top Echelon has made nearly $350,000 and nearly 90% of that total was earned through contract placements.

The numbers don’t lie. The money is there, and it could be yours for the taking. Contracting isn’t going away. Quite the contrary; it’s becoming more and more popular, and 2005 could be its biggest year ever.

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