Pick up in use of contract executives

Megan Alexander, general manager at Robert Half says despite perception that contracting increases in downturn, the use of contractor executives was actually at its bleakest during the recentrecession. In many cases organisations were reluctant to use contractors or temporary staff.

“However, we are seeing marked increase in the use of temporary and contract staff in 2011 as organisation take their time to find the right permanent staff, “ she says. “We are seeing organisations reassessing permanent roles and gauging what level and scope the role should be. They are using temporaries to cover the workload while that exercise goes on.“

Drake Executive managing consultant Matthew Hullett says many companies are starting to look at growing staff numbers again but, because of the uncertain business environment, they are still cautious about diving headlong into hiring more staff until there is absolute certainty they will add value to the business. Engaging contractor means they benefit from the skills and knowledge of an experienced professional without carrying the risk of fully employing that person.

“We are also moving into an employment market where there is growing demand for flexibility in the way we work. People are developing wider range of skills and experiences across multiple industries and individuals are now starting to realise the value of their own brand. This means that we will see an increase in people looking toward contracting as viable career that would give them the flexibility and variety they are looking for.”

However, Hullett cautions it is important to get the balance right between permanent and temporary staff. If you have too many temps, it can make it difficult to create team culture.

Interestingly, Marc Burrage, executive general manager for Hudson NZ, says the latest Hudson Report hiring intentions survey shows that permanent hiring intentions are stronger than contracting. “This suggests companies cut too deep during the recession and as they gear up for growth recognise the need to move to replace these roles as their competitors in the war for talent are also doing the same thing.”

However, he says contract executives will continue to be an important part of the workforce to cope with business fluctuations, provide scale and deliver projects.

Tony Wai, Crackerjacks’ managing director, says management consultants are now becoming popular options particularly in the area of change-strategy. “In many instances this has enabled full time employee at different level to come into the business thereafter. The economic cost of using contractor can therefore often be cheaper than full time employee for the assignment when you look at the output delivered over wider timeframe.

“Our most recent recession has brought organisational structures under scrutiny and highlighted the importance of lean and efficient operations. Contractors and temporary staff are essential elements in the workforce and are critical to achieving maximum productivity. This phenomenon is here to stay.”

This is echoed by Hassanah Rudd, manager contracting services at Frog Recruitment, who sees the trend to contracting only increasing as it has since Charles Handy first started talking about it 15 years ago in the Empty Raincoat, where he used the analogy: “… where in the past an organisation was like castle, it will become more like condominium: an association of temporary residents gathered together for their mutual convenience”.

The March issue of NZ Management looks at the key challenges and opportunities ahead in the battle to attract and retain management talent and at appropriate salary strategies for the current business environment.
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