The Talent Blueprint – The contractor conundrum: Pay vs purpose

Welcome back to The Talent Blueprint, the LinkedIn newsletter by Hays that gives you insights and advice to use in the world of work.

In this edition, we’re talking temp work. Contractors, freelancers, agency workers and all the other contingent workers are a vital part of the blended workforce. In the past, some may have considered temp work as insecure, but the world of work has changed, and the importance of temporary workers has never been greater. They bring specialist skills to organisations in times of acute talent shortages, allowing businesses to grow. At the same time, the opportunity to move from project to project gives the worker the chance to thrive and excel, whilst maintaining control over their career.

Last month we asked the question, “will we ever close the skills gap?” The answer may be complex, but one thing is for sure: we won’t conquer the crisis without contingent workers.

However, organisations are navigating a number of challenges when it comes to their contingent workforce, including the balance between pay and purpose. The COVID-19 pandemic shone a bright and uncomfortable light on skills shortages and the need to ramp up digital transformation in almost every organisation in the world. This led to a demand in contractors, which in turn increased their day rates.

Fast forward to today and the market has changed. As Adam Shapley, MD Technology and Technical Workforce Solutions, Hays ANZ said: “Now markets have normalised, organisations have realised they took their eye off their contingent spend during the pandemic. The challenge now for many businesses is about getting costs back under control.”

Many are finding themselves in the awkward position of wanting to renew a contingent worker’s contract in an environment where market rates have dropped, leading to difficult conversations that some organisations feel ill-equipped to have.

Richard Barnett, MSP Director, Hays ANZ pointed out, this is where access to a Managed Service Provider (MSP) can help. “We can provide data and can inform organisations when markets are going up or down. This gives them visibility over payrates.”

Whilst pay is an integral part of working with contingent workers, purpose, in some cases, is more important.

Future focus: Purpose plunders pay for some contractors

If you want to have a successful contingent workforce, you need a compelling Contractor Value Proposition (CVP). The importance of this cannot be understated, as Richard commented: “Some clients have such a strong CVP that contractors are willing to work at a lower rate because they perceive that they are getting more benefits than with other organisations who may be willing to pay more.”

But what will make your organisation’s CVP standout above your competitors? What will make a contractor pick purpose over pay?

“Skills,” continued Richard. “A strong CVP will give the contractor the opportunity to pick up new skills, by exposing them to other technologies or duties beyond what they’re contracted to do.”

We’ve seen similar sentiment in our EMEA-wide survey – The Tech Talent Explorer. Be it perm or temp, we found that 82% of all EMEA tech professionals desired AI training. We also found that 37% of EMEA tech specialists who left their jobs in the past year did so because of a lack of career development opportunities.

Think about what other opportunities you can provide, because upskilling as a contractor is crucial to a successful career… more on that later.

How you handle stand-downs (a period of enforced absence without pay), is also crucial. Some organisations have received criticism for trying to cash-in on typically quieter months by mandating stand-downs with little-to-no notice. This leaves workers without an income for a period of time. This might save you financially in the short term but the long-term reputational damage could prove to be costly.

A departure from the historical thinking around contingent workers being little more than a resource is crucial. Temp talent will be loyal to your organisation if you’re loyal to them.

Career corner: Taking control in uncertain times

There’s often a misconception that contracting work is unstable. Jumping from one project to another and potentially having downtime between work is not for everyone, especially during periods of economic uncertainty.

But is temp work any less stable than perm?

“Permanent employees in tech, on average change roles every 2-3 years,” Adam noted. “The average tenure for contracting is about a year, perhaps more in some of the large organisations. There is a valid argument that perm might be psychologically more stable but we’re still seeing people early in their careers changing jobs fairly rapidly. Is doing a 1-2 year contract any different?”

There are steps that contractors can take to ensure they are out of work for as little as possible.

1. Adapt your CV: It’s not uncommon for Hays to work with contractors who have five or more CVs, which allows for a tailored sales pitch depending on the next project they’re applying for.

2. Be memorable during your time with an organisation: Network within the business and be sure to flex your soft skills. Adaptability, communication and organisation are vital soft skills to have if you’re to be a successful contractor. “Remember, you might only be there a short time but, if you do a good job and are well liked, it will lead to success later on,” added Adam. 

3. Don’t forget to upskill yourself: If exposure to skills is crucial to many contractors and the vital part of a compelling CVP, you better believe that continuous learning plays a pivotal role in being a successful contractor. As Richard puts it: “The more specialised you are, the more you might get paid…until those skills aren’t needed any more. If that’s all you’ve ever done, that’s a problem.”

4. Never leave during a contract: The pay vs purpose debate continues, and in this case, leaving halfway through a contract for more money elsewhere is short-sighted. “If you’re in it for the long-haul, finish your work and get the references. Partnering with an agency is a good way to do this,” said Adam.

Check out our career advice hub for more insights.

Contractor Hacks: A new video series by Hays

We’re excited about the upcoming launch of our new video series: Contractor Hacks.

Contractor Hacks will give viewers insights and advice on working as a contractor, from contractors themselves.

We'll be speaking to temp workers across the world who have worked for clients such as Deloitte, Accenture and Cognizant.

Stay tuned to our LinkedIn and YouTube channels for more news on Contractor Hacks.

Thank you for taking time out of your day to read The Talent Blueprint. Are you an organisation hiring contingent workers? Or are you a contractor yourself with advice to offer our readers? We'd love to hear from you! Join the conversation in the comments section, and don't forget to subscribe to our newsletter, to receive future editions direct to your inbox.