Looking ahead and planning for an array of outcomes is an important risk management practice and opportunity for businesses. When it comes to workforce forecasting, the shift we’re currently going through is palpable. The future of work is going to change in terms of increased remote work, increased flexibility from companies, and a potential rise in contract workers.
We’re going over the pros of hiring contractors, and observations we’ve seen in the Denver tech market. If you’ve never thought about hiring contractors, this also explores how in some cases there can be room for contract hires as well as full time placements. Following a growing trend in tech, many employers like Google are exponentially hiring contractors, to save time and get the ball rolling on their business goals with greater flexibility.
Overall, there is less risk in growing your team with contingent labor. As recruiters, we have observed a theme within the tech sector where companies hire contractors to maintain existing platforms or tweak apps and products, while also hiring full time employees to focus on new development or customer-oriented requests. This strategy allows companies the flexibility to extend contractors, or hire someone full-time after a contracted trial period.
It’s common for contractors to pay their own taxes, and hold their own insurance because they work for multiple projects within a shorter time frame. This independence from contractors can be attractive to companies with smaller budgets, or for those looking for occasional or temporary help.
Hiring contractors can save money, time, and help your business get your final product or goal sooner. If a company hires an individual for a 3-6 month project on a contract basis, it creates space for a trial period in the relationship, which often benefits both parties. Contracts allow for companies to have peace of mind without a long-term commitment.
Why does it matter? For hiring managers, the recent shift from in person interviewing to virtual interviewing creates additional challenges when feeling secure about the individual they want to hire. It can be difficult to feel fully confident in a hiring decision without meeting someone face-to-face. Hiring on a contract basis allows time for that relationship to form. If you’re creating a workforce forecasting plan, our data suggests an upward trend in contract work today, and moving into the rest of 2020.
While there are many benefits in hiring contractors, knowing the legality is significant. 1099, W2, where do you start? BWBacon’s resource on defining contractors (1099 v W2) lays out the specifics for how contract work is defined in the State of Colorado.
To remain compliant with government agencies and the IRS, 1099 and W2 forms must be filled out properly according to the type of work the individual does. Back in 2000, the now famous Microsoft lawsuit is one example of the full-time versus contractor blunder companies can walk into. We recommend seeking legal counsel to have all your ducks in a row if you are hiring contractors for the first time.
It is also important to be aware of rising concerns in the tech industry around hiring contractors in terms of worker’s rights, who is eligible for benefits, and upward mobility. Does your company have great benefits to offer an incoming candidate whether for a full-time or contract position? Do contractors have any access to equity, perks, or benefits if they are working for your company?
Company culture and competitive benefits are becoming increasingly important to developers and engineers in the tech industry. Marissa Geist of Cielo noted in a recent interview,
“At the end of the day, there is no substitute for engaged, effective, long-term talent. Despite the potential cost savings that a contractor can provide, if you fail to make contractors feel engaged and connected to your company, the drag on culture and momentum can actually be more costly than the immediate savings that contractors bring in the short term.”
Last year, after a survey revealing that workers thought SurveyMonkey could do more to support their contract workforce, the company added access to medical, dental and vision plans and paid time off for all of its contractors. As companies decide where they stand in terms of supporting all of their employees, the conversation about what contractors need to succeed is developing.
BWBacon is perfectly positioned to facilitate taking the next step in hiring contractors. In our own workforce forecasting we have found, especially recently, that people are interested and motivated to hire on a contract basis. Candidates are interested in this as well, as these opportunities present more flexibility and the option to find another position through a recruiter can ease the job search process.
Ultimately, the workforce is changing in a lot of respects. Regardless of recent times escalating remote work operations, more and more companies were already moving to a remote arrangement. This impacts all new hiring for full-time and contract workers. As work life itself changes, we hope this resource opened the conversation about what it looks like to hire on a contingent basis. Reach out to our team today for more details and ways we can help grow your team.
Here at BWBacon Group, we know and live what you are experiencing as an employer or job seeker in Denver, Boulder, Dallas, San Francisco, New York City or any of the other cities we work in. We believe great recruiting starts and ends with understanding people.
If you have any questions about living, working or playing any of the areas we serve, please contact us. We are happy to help. Seize the day, every day, that’s what we say!