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Why Add Contract Placements to Your Staffing Business?

Contract placements create an annuity stream that gives you a stable and consistently growing income stream.  With generally less work per placement i.e. sourcing, number of interviews, etc. you are able build a headcount of workers that pay out an hourly/monthly margin.  This is because contract placements last 3-6 months and often renew longer. During this time, when you place additional contractors on 3-6+ month assignments the margin paid out on an hourly/monthly basis grows with the headcount you have billing.  This annuity stream is in addition to your full time placements fees.  In many cases the consistent monthly income from contract margin will become the income you will count on with the full time placements becoming the “gravy” that is a nice addition to your monthly income.

The figure below depicts the placement fee amounts received in a 12 month period.



Fast Facts

  • 25% of the North American workforce is some type of contingent labour.
  • Between 1997 and 2009 contract employment increased by over 300% despite the economic downturn.
  • Only 30% of contract recruitment is client sourced

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Contingent Workforce Growing in North America and Foreign Markets

There has been plenty of evidence to indicate that the workforce in Canada and America is shifting to a larger portion of contract and temporary workers. However, the contract workforce is actually growing globally, and many foreign workforces are now made up of a significantly higher portion of contract workers.

The Telegraph recently reported that the number of contract workers in South Korea has almost doubled since 2002, and now currently accounts for about a third of the entire workforce. This trend is evident all across Asian markets, from Shanghai and Singapore.

Similarly, the Australian Taxation Office, 4.1 million workers are considered contract workers. The number of contract workers has dropped in some industries in the UK; however it has risen in others. The uncertain economy has prevented organizations in some industries in the UK from hiring contract workers. However, having a portion of the overall workforce as contingent has allowed organizations in the UK to remain agile and adjust their workforce according to the economy and industry demands.

This information proves that organizations are increasingly seeing the benefits of employing contract and temporary workers. The benefits are not only apparent in Canada and the US, but also in other foreign economies.

As the contract workforce grows, organizations will face increasing managerial demands from their contract workforce. There are many complex laws around employing contract and temporary workers, and organizations need to ensure that they compliant with these laws. One way in which employers can ensure this is to implement an MSP program.

For more information about how your organization can benefit from an MSP program, click here, or contact:

Christina Fabugais
Marketing Manager
Contingent Workforce Solutions Inc.
Direct Phone:  416-642-9077
Toll Free:  1-866-837-8630 x9077
Email:  christina.fabugais@cwsolutions.ca

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Contract Labour: The New Normal in the Workforce

US News reported that since the end of the recession, 54% of new jobs in the USA have been temp work. This statistic comes from the Bureau of Labor Statistics, which also indicated that roughly one in every 50 Americans held a temporary or contingent position as of the end of October.

While you may think that these trends are reflective of the uncertain economy, and that employers are hiring temporary labour because they are unsure that they will have the resources to hire full time staff, you may not be seeing the whole picture. The uncertainty in the economy is certainly driving employers to hire temporary or contract workers; however many employers are beginning to see that their contingent workforce allows them to be agile in the marketplace. They can hire highly skilled workers for specific projects, and when the project is over, they are not forced to find other tasks and roles for these individuals. US News reported that a survey issued by the consulting firm McKinsey 58% of employers said that they plan to hire more “part-time, contract, and temporary workers” over the next five years.

Labour market experts are also saying that a fundamental shift is taking place in the workforce, as temporary and contract workers can now be found across all industries and job functions. Before, temporary and contract labour was primarily limited to manufacturing, construction, clerical and other relatively low paid job functions. However, now contract workers can be found in Information Technology, Engineering, Accounting, Health Care and many other industries.

People are turning to contract work for various reasons. Some people have been laid off, and find that temporary and contract work is the best way to gain income while searching for full time work, and many are finding that contract work often leads to full time positions at those companies. Many find that they prefer the freedom and flexibility of contract work. They are able to choose when and how much they work, and they are able to be their own boss. Still others have found that they would like to work after retirement; however they want to be able to choose their own projects and how much they work. Contract work provides the perfect balance for those looking to work after retirement.

Employers that traditionally had 100% full time core workforce are now looking to migrate to an 80% full time, 20% contingent core workforce. The 20% are usually perpetual contractors, with no expectation to move these people back to full time. This gives employers the flexibility to adjust to changing business demands. However, employers need to be wary of the legal and tax risks that come with employing contract workers, especially on a long-term basis. The laws around contingent workers are complex, and many organizations do not have the necessary resources or competencies to manage these workers in house. For that reason, many employers are also using an MSP provider in order to mitigate risk and save money.

For more information about how your organization can employ contract workers and benefit from an MSP, click here or contact:

Christina Fabugais
Marketing Manager
Contingent Workforce Solutions Inc.
Direct Phone:  416-642-9077
Toll Free:  1-866-837-8630 x9077
Email:  christina.fabugais@cwsolutions.ca

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Contract Work: The Silver Lining in Youth Unemployment

Youth unemployment has been a hot topic in the news lately, with youth unemployment rates reaching as high as 40% in economically troubled countries such as Spain. While the outlook is not so grim in Canada, many people are still concerned. Youth often face more difficulties finding work during a recession because of increased competition from more experienced candidates.

It’s not all bad news. Companies are starting to realize that as baby-boomers retire they will be left with a large employment gap to fill. This means that young people need to be trained and ready to move into these roles. One of the easiest ways for companies with limited resources during difficult times to train potential new employees is by hiring young contract workers. When the company recovers, it can then hire the trained youth for more contract projects, or in a permanent position.

In Canada there are jobs available for youth – just not always permanent full time jobs that they expect after completing their education. However, temporary or contract work could actually be the best answer for youth. Many young people want mobility; they want to have time off from work to travel, or they want to move to new and exciting places. Contract work allows young people to work and earn money, and have the mobility they crave.

Similarly, many young people do not have enough experience to know what type of work they enjoy doing. Contract work allows youth to “test” various industries and roles in a non-committal manner. If they do not enjoy the job, they can easily move on to something else.

Difficult economic times are often more difficult for young people. However, by pursuing contract work, youth can build their skills and knowledge as well as find the freedom that they desire.

For more information about how Contingent Workforce Solutions can help you manage your contract workforce, or become a contract worker, Click here or contact:

Christina Fabugais
christina.fabugais@cwsolutions.ca
1-866-837-9077

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The Importance of VMS and Contingent Workforce Analytics

The most expensive and most complex resource of any business is its people. Many factors affect human performance, and, as a result, the human dimension is generally considered difficult to measure in terms of efficiency and improvement. With visibility into their workers’ performance, however, companies can better manage their entire workflow process.

Companies often have very little insight into their contract employees; a segment of the human dimension that poses high risk with employment and tax law and usually accounts for organizations’ largest single line expense. Contingent workers currently account for approximately 25% of the workforce, and this number is expected to increase. Companies need to effectively manage this aspect of their human resources in order to succeed in today’s changing employment market. Workforce analytics give companies visibility into their contract workforce, allowing them to better manage workflow, productivity, and compliance.

A Vendor Management System (VMS) can provide companies with the workforce analytics that provide companies with insight into their contract workforce across the entire organization. With greater insight, companies can determine who is doing what, and how well they are doing it. This allows organizations to allocate resources, motivate workers, and better understand human-resource related costs.

There are four key components to an effective Workforce analytics program. These components are:

  • Interactive – Workforce Analytics must be used as a living tool with dynamic data that integrates with historical data, including exceptions and outliers.
  • Intelligent – Analytics programs should be predictive and provide enough context to not only answer questions, but also raise them.
  • Actionable – The data must generate realistic recommendations that guide management decisions toward cost savings and risk mitigation.
  • Motivational – Workforce Analysis should go beyond mere mandates and inspire employees to have a stake in best practices.[1]

Successful businesses always look forward and adjust their strategies to match the changing market. Implementing a VMS and a workforce analytics program is one way that companies can adapt and better manage their most complex and most important resource: their people.

[1] Leeby, Doug. Workforce Analytics: How to Define, Measure and Drive Productivity in Today’s Organization. http://www.sig.org/i4a/pages/index.cfm?pageid=5748

For more information about how you can benefit from a Vendor Management System, contact Christina Fabugais about SimplicityVMS

Christina Fabugais
Marketing Manager
Direct Phone:  416-642-9077
Toll Free:  1-866-837-8630 x9077
Email:  christina.fabugais@cwsolutions.ca

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Facing the Newest Challenge in Talent Sourcing: Retaining Baby Boom Generation

It may seem unlikely in today’s economic climate, but a war for top talent is looming. The recession has given companies the false sense that good people are abundant; however this is will quickly change as the largest segment of the workforce, the baby-boomers, begin to retire en masse. Profit Magazine recently published an article entitled “The Incredible Disappearing Workforce” which details the struggle companies are facing, and will continue to face, with finding suitable replacements for their retiring employees.

Profit Magazine states that “the boomer wave is so big that no combination of measures can replace all of the retiring workers”[1], which indicates that companies need to get resourceful in their search and retention strategies for top talent. One way to do this is through contract work. Many older boomers have indicated that they are eager to return to work; however they are not eager to return to 60-hour work weeks, having employees report to them, and moving up the corporate ladder[2]. Instead, they want to work as individual contributors[3]. Contract work provides the perfect opportunity for retired or soon-to-retire to do this. The statistics already show that this trend is occurring, and it will continue to increase in the coming years[4].

Companies need to prepare themselves for uncertain labour conditions, and, as contract labour continues to rise with this trend, companies will require assistance with managing their contract labour. Aberdeen Group’s comprehensive study of Contingent Labour Management indicates that 50% of enterprises need to better manage all facets of contingent labour[5].

Already, best-in-class companies are 35% more likely than industry average companies to use a Managed Service Provider solution for their contract workforce needs, and 63% of best-in-class companies are using a Vendor Management System[6]. This trend will likely continue as organizations hire more contract baby boomers.

In order to remain competitive when top talent is difficult to find, organizations need to be resourceful when recruiting and retaining experienced workers. Using a Managed Service Provider that focuses on managing contingent workers allows companies to develop and implement strong alumni and retiree programs, and keep sought after knowledge and experience for longer.

[1] McElgunn, Jim. The Incredible Disappearing Workforce. Profit Magazine. Oct 2011

[2] McElgunn, Jim. The Incredible Disappearing Workforce. Profit Magazine. Oct 2011

[3] McElgunn, Jim. The Incredible Disappearing Workforce. Profit Magazine. Oct 2011

[4] Orler, Elain. Managing Contingent Labour. Human Resources Executive Online. Sept 2 2011. http://www.hreonline.com/HRE/story.jsp?storyId=533340887

[5] Dwyer, Christopher, J. Contingent Labor Management: Strategies for Managing the Complexities of the Contingent Labor Umbrella. Aberdeen Group. June 2010

[6] Dwyer, Christopher, J. Contingent Labor Management: Strategies for Managing the Complexities of the Contingent Labor Umbrella. Aberdeen Group. June 2010

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Contract Work Provides a Better, Happier Life

A recent study has shattered the myth that, in tumultuous economic times as these, full-time employees are forced into contract and freelance work due to layoffs and cutbacks. This study found that Contractors actually prefer the independent lifestyle, and, counter to popular belief, many individuals are choosing self employment.  A mere 13% of respondents were forced into contract work due to layoffs, and 80% of accidental contractors say they are happier now than they were before engaging in contract work.

Freelance and Contract work empowers women and men to lead the lives they want to live. 30% of female respondents and many men want to have schedules that accommodate the demands of daily life. They chose to be self employed because contract work makes this flexibility possible. Similarly, individuals have grown tired of answering to someone else, therefore over 20% of surveyed men, and many women, cited a desire to be their own boss as their top reason for switching to contract work.  Over half of the respondents were between 30 and 49 years of age, which indicates that Generations X and Y are switching to and finding success in contract work.

The study also pointed out that while the majority of respondents work full time as Contractors, some also use contract work for supplemental income. Contract work gives individuals the ability to increase their means because it affords more freedom to choose projects that work with an already busy schedule. This is also a great way for new graduates or people looking to switch careers to gain valuable job experience without sacrificing income.

The study found that optimism about future business prospects is high among contractors even though it also found that finding clients is the biggest challenge that contractors face today. Contractors primarily rely on referrals and networking to find work, and over 45% indicated they intend to leverage their personal network more in the coming year. However, over 45% also specified that they intend to social media more in their search for clients.

Contract workers currently represent 25% of the Canadian workforce, and this percentage is growing. People aren’t being forced into contract work due to layoffs; they are increasingly finding that contract work will allow them to enhance their lives both personally and professionally.

To find out how you can become a contract worker, contact CWS at

Christina Fabugais
Sales & Marketing Manager
Phone: 1-866-837-8630 Ex. 9077
Email: christina.fabugais@cwsolutions.ca

All statistics were found in: Gandia, Ed. 2011 Freelance Industry Report: Data and Analysis of Freelancer Demographics, Earnings, Habits and Attitudes. Sept, 2011. http://d3go1ztdjepprc.cloudfront.net/ifd2011/FreelanceIndustryReport2011.pdf

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Increasingly Mobile Workforce Requires Rethinking Traditional Payrolling

This week is the 17th annual National Payroll week, which is designed to build greater awareness of the size and scope of payroll and its impact on business, government and employees across Canada[1]. The workforce is constantly evolving, requiring today’s payroll professionals to keep up with ever changing employment and tax legislation.   Contract labour has emerged as a major workforce trend and this has impacted traditional methods of payrolling, which are typically designed for full and part time employees.

Contract labour has increased in Canada; a trend that was driven by the downturn in the economy as more companies began to hire contract and temporary labour in order to adapt to organizational needs and changes in the economy.  Since 1997, the contract labour market in Canada has grown by 300%, and it currently accounts for 25 to 35% of the North American workforce, bringing in 250 billion dollars annually.

The shift in the workforce toward contract labour has had an impact on the efficacy of traditional payrolling methods. It is now important that organizations execute the necessary due diligence when administering and payrolling contract and temporary workers. In the last 18 months Canada Revenue Agency (CRA) has increased the frequency of Worker Classification Audits to determine whether organizations are properly classifying their workers as employees or self employed contract workers. Without proper documentation and administration, organizations face the risk of having their contract worker deemed an employee. They are then subject to pay up to millions of dollars in owed payroll remittance premiums, back-taxes and wages.

Contract workforce administration specialists like Contingent Workforce Solutions (CWS) assist organizations with identifying worker classifications and ensuring proper government remittances; this mitigates the risk of worker misclassification and can save organizations millions of dollars. Jeff Nugent, Managing Director of Contingent Workforce Solutions believes, “Companies can no longer afford to do without the tools that allow them to account for and manage contract labour.  This is not a luxury item – it’s a need.”

About CWS: Contingent Workforce Solutions is a business process management and advisory firm that help its clients gain control of their contract workforce. With close to 25 Years of Experience in Contractor, Temp staffing and Vendor Management Solutions, CWS is a partner that you can trust. Contingent Workforce Solutions’ was recently recognized in Profit Magazine’s 12th Annual PROFIT HOT 50 Ranking as Canada’s top new growth company, and was also awarded LoyaltyOne’s 50 Most Engaged Workplaces.

[1] National Payroll Week. The Canadian Payroll Association. http://www.payroll.ca/AM/Template.cfm?Section=National_Payroll_Week

For more information about how you can update your payrolling system to match the needs of today’s workforce, visit our website, or contact:

Christina Fabugais
Sales & Marketing Manager
Phone: 1-866-837-8630 Ex. 9077
Email: christina.fabugais@cwsolutions.ca

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Temporary & Contract Staffing on the Rise

Remember when everyone kept talking about the recession and the strain it put on our economy? Well, although people are STILL talking about it, at least now it is in the context of a steady road to recovery. Not to say that we are out of the wood-work just yet, but it seems that employers are beginning to hire again which is great news for both our economy and our nation’s morale. At the forefront of employment growth is temporary and contract labour. As discussed in previous CWS Blog posts, temporary and contingent labour is a great way for organizations to employ the resources they need in an efficient and cost effective manner. So it should be no surprise, that those in the temporary staffing realm are reaping the benefits of this much anticipated, and much talked about, economic recovery.

In a recent article by Staffing Industry Analyst, Benchmarks: Temp Staffing Revenue,stated that temp/contract staffing revenue increased by 12% in 2010 from 2009 totalling approximately $80 billion. The research projects that by 2012, the temporary/contract market will make up $97.3 billion.

Other temporary/contract staffing facts:

  • 27%: Growth in staffing of industrial jobs in 2010, the most growth of any temporary and contract staffing segment.
  • The strongest performing of the professional segments were IT and engineering, with each growing 13% in 2010.

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