The pandemic has highlighted how unprepared many companies are for a global economic crisis. Not many were lucky enough to survive the onslaught of the virus as many businesses were forced to close due to quarantine measures. Albeit the sudden forced closures, the majority of businesses are starting to resume operations with safe distancing and temperature checking measures in place. At such a crucial time, businesses are looking to recover and grow as the economy is picking up. This has led to an increase in recruitment activities especially in the contract staffing sector by partnering with contract staffing recruiters.

Contract staffing services have seen a spike in demand. This is due to the fact that the economy is still unpredictable, and companies are looking for a more temporary or short-term solution to their manpower needs. This helps the company save costs as well as avoid a potential long-term liability. However, with its benefits, there are also disadvantages that come with it. In this article, we’ll highlight 3 pros and cons of contract staffing.

Pros

1 – Flexibility

When hiring a contract staff, a company does not have to worry about the long-term liability and costs that come with a permanent team. It is also easier to control the costs that come with recruiting contract staff vs permanent staff as they can be hired for a shorter period of time. This is ideal for peak periods, short term projects and campaigns.

Contract staff can also be moved around the company more freely to fill gaps where needed. This makes it easier for the company to adapt to manpower shortages or to boost the efficiency of departments by providing more manpower.

Most businesses choose to recruit contract staff through an agency as it takes less time, and it is more efficient to outsource the entire process. These agencies are also more flexible to work with as it’s a service compared to maintaining an in-house permanent HR team. Also, with an extensive database, a contract staffing agency is able to search and hire a more relevant candidate based on a company’s needs.

2 – Cost

When hiring a contract staff, the fixed cost of maintaining a permanent employee becomes a variable cost. The cost is also lesser as a contract staff is not entitled to the full benefits that a full-time staff would. This saves the company time and money.

Also, by partnering with a staffing outsourcing services company, the business is able to reallocate resources to focus on core competencies. This decreases the cost to grow their business which would have been otherwise spent on recruiting which is usually not a core process in businesses.

3 – Access to niche skills and expertise

A business can easily hire contract-based staff with a set of niche skills for a project, campaign and even on a short-term basis. This provides the business with the necessary set of skills and expertise needed for a particular function which they may not usually require on a long-term basis.

Contract staff are usually very versatile as they’ve worked in different industries and teams previously. This proves their experience to be invaluable which in turn can be passed down or taught to current full-time employees.

Cons

1 – Lack of company loyalty

As contract staff are usually hired temporarily based on a project, function or time period, many do not remain loyal to a company. This usually just leads to employees that function based on the bare minimum of their job scope but in worse cases, there may be a misalignment in business goals and the goals of the contract employee.

The repercussion of losing their position in the company is also lesser compared to a full-time employee and with little incentive to stay, many can be complacent with their jobs.

2 – May be disruptive for other employees

Contract staffing and temporary staffing may prove disruptive for other employees due to high turnover rate as many are short-termed workers. With an inconsistent pool of contract staff, processes may have to be retaught to new employees. This process takes away valuable productive time that can be used to focus on other core competencies.

3 – Additional administrative procedures & costs

When hiring contract staff, there has to be a set of separate policies and procedures for compensation, benefits, hiring and even work processes. The managers and supervisors will then have to be aware of these processes and some may require them to perform additional administrative duties. These will then take up time that could otherwise be used elsewhere – impacting productivity negatively.

However, contract staffing pros do outweigh the cons and majority of the disadvantages mentioned in this article can be easily negated by partnering with a staffing outsourcing services company.

At Talent Spot, we are equipped with the best HR professionals and technology available to facilitate your HR needs. If you’re worried that these pros and cons of contract staffing may be disruptive for your employees, fret not! We have a consistent and extensive database of candidates with a variety of skills that fits the different needs of every client. We can track and engage these candidates again for future projects to ensure consistency. Moreover, with this database, we can better match relevant skills and expertise depending on your needs.

Here at Talent Spot, we also provide admin support to ensure that your employees can focus on core competencies. With our end-to-end staffing solutions, we will plan, execute, onboard and optimise your recruitment to ensure the best outcome for the lowest cost possible. Processes are also carefully integrated to ensure smooth hand-over once a candidate is hired. Our services are fully customisable to remain cost effective and to cut down unnecessary processes when it comes to your business efficiency.

Interested to know more? Enquire more about our services!