Capitalize on the New Blended Workforce Model
It’s no secret that contract staffing is on a growth spurt with no end in sight. Throughout the past few years, it has grown steadily and broken records month after month. We could give plenty of statistics to illustrate this growth. However, what you need to know as a recruiter is HOW companies are utilizing contractors and transforming the American workforce in the process.
Rather than using contractors sporadically in limited circumstances, they are building a new blended workforce model. This new model integrates integrating both direct hires and contractors as part of a deliberate business strategy.
Components of the new workforce model
This blended workforce model consists of a small core of traditional direct employees supported by a larger outer ring of contractors. The direct employees in the core are key personnel with the experience and longevity that can make or break the business. That makes turnover in this group highly disruptive. While the work of the outer ring of contractors is just as important because they are often responsible for day-to-day tasks and critical projects, turnover is not as big of a concern.
What companies like about this new blended workforce model is that the outer ring can easily be adjusted based on business demands. It can be increased during peaks and just as quickly reduced when economic or business conditions dictate. Companies are looking strategically at each open position to determine if they really need a direct hire or if the job is better suited to the outer ring of contractors.
This shift is largely a result of the most recent recession. This recession taught companies to run lean and limit overhead costs. As companies struggle with increasing employment regulations, additional taxes, growing professional liability requirements, and more, they are using contractors to continue matching workforce to workload to maintain costs.
One of those costs is benefits. Because the company is not the legal W-2 employer of its contractors, benefits for those contractors is handled by a third party (recruiter or recruitment back office).
Therefore, the company doesn’t pay the employer share of premiums. They also don’t have to deal with the mandates of the Affordable Care Act (ACA). That becomes the responsibility of the third party, which also handles all of the other employment-related responsibilities. These include things such as processing payroll, new hire paperwork, benefits, Workers’ Compensation, unemployment claims, etc.
Contractors: 40%-50% of the workforce
Experts believe the blended workforce model could be a permanent, structural change in employment. By 2020, many are predicting that contractors will comprise 40-50% of the entire American workforce.
As the popularity of this model grows, it will create a consistent need for quality contractors. To capitalize on this trend, all you need to do is offer contract staffing to your clients. Outsourcing the contract staffing back office to a service such as Top Echelon Contracting can help you do this with no ramp-up time, overhead, or additional staff.