When recruiting business analysts and project managers for permanent positions, the legend of King Canute springs to mind. The medieval ruler’s famous and futile attempt to turn back the tide is not dissimilar to convincing high day-rate contractors of the benefits of a return to the permanent market.
With the wave of permanent employees moving to shorter, fixed-term contracts showing no signs of abating, what can companies do to try and turn back this tide?
Hiring organisations and hiring managers need to appreciate why the contract market is proving so attractive to skilled professionals within the financial sector. Only with this understanding can the shortage of permanent candidates be improved.
First and foremost, the financial rewards on offer can be significantly greater than those for permanent workers. This is a stark fact that cannot be ignored or underestimated.
Comparing, on a pro-rata basis, permanent salaries with contractor day-rates, we often see differences between 70 and 90 percent. Admittedly, this doesn’t include additional benefits like a pension, holiday pay, healthcare, etc. But this huge disparity cannot be ignored or underplayed.
Many contractors enjoy the freedom of being able to pick and choose which companies, locations and projects they tackle next. The more experienced the contractor is, the greater demand there is for his or her skills, and the greater the freedom they have.
Over the course of only a few years contractors can be exposed to a huge variety of different work.
This not only provides stimulation and interest, it builds up invaluable experience – which in turn leads to even greater marketability and earnings potential.
4. Work-life balance
Some contractors are in the enviable position of being able to take a few months off following an assignment of a similar duration.
This gives them the opportunity to pursue – if they wish – once-in-a-lifetime personal ambitions. This might include anything from studying for further qualifications, embarking on a trip around the world, building their own house or writing that long-thought-about novel.
To compete with advantages of contract work, hiring organisations and their recruitment partners have to develop and better communicate the benefits of a permanent position within an organisation.
These would include:
1. Pay & 'hard' benefits
There is no way around this. Pay is the elephant in the room. If companies wish to compete against the contract market for the best talent - particularly in roles such as business analyst and project manager - many need to increase the packages on offer. This is basic supply and demand economics.
If companies are not willing to do this – and there is a raft of reasons why such a policy may not be pursued – they either have to accept the dearth of suitable candidates or adopt and invest in a different approach.
Bonuses, healthcare and other staff benefits also play their part in creating an attractive package. And certainly a market-leading pension is still a stand-out financial tool for retaining permanent employees.
Barring a significant and immediate uplift in the permanent salaries of business analysts and project managers, companies need to redouble their efforts in promoting the ‘softer’ attractions of a full-time role.
There is certainly something to be said for feeling part of a team, working with others to achieve long-term goals and being an integral part of an organisation and its future success.
These factors should not be underestimated in determining overall career fulfilment.
But only the fortunate few are in the position where they feel they can compromise on financial incentives in exchange for these ‘softer’ benefits.
One major concern employers have in over-relying on contractors is ‘brain drain’ – that the skills, expertise and experience of short-term workers leave the business when they do.
To counter this, companies have to work harder to recruit, train and develop staff lower down the career ladder. This, however, is not a quick fix and requires investment of both time and resources. Moreover, the danger still exists that eventually these employees will be lost to the contract market.
By fully understanding the benefits and attractions of the contract market, companies will be in a better position to draw talent back to permanent positions.
However, like King Canute before them, organisations shouldn’t underestimate the powerful forces they face.
Those that do will struggle to maintain a foothold in an already fiercely competitive market.