Risks and Rewards: The Contractor-to-Employee Path
As the word “recession” is tossed around to describe the future state of the economy, there may be elevated risks associated with being or becoming a contingent worker. A contingent worker is defined as a contractor, temporary worker, or part-time worker typically working under a contract for a fixed period of time or for a specific project. However, even though the US economy looks challenging, temporary positions can be a great entry way to gain permanent status.
Why do companies hire temporary workers?
Contractors (third party employees) benefit host companies by offering flexible and affordable solutions because of lower overhead costs. While some contractors could make more per hour than regular staff, they cost less because the host company does not have to provide benefits. When times are tough financially, there is less risk associated with terminating a third-party contractor.
What are the pros and cons?
There are perks to being a temporary worker and for companies hiring temporary workers. For example, a popular entry way for incoming talent is through their temporary worker pipeline. Companies get to see the results of candidates while they are actually on the job. It’s the “Try Before You Buy” technique and it works both ways.
The downside to being a contractor is the lack of stability and health benefits (although some temporary staffing agencies like Adecco Technical do offer benefits). Sometimes contractors are paid less to do the same jobs as permanent workers. As a contractor, there can be a lot of unknown to deal with. A common question that temporary workers ask themselves is, “Will my contract be renewed?” It takes a lot of patience and faith in your performance and your host company to stay sane while waiting for an answer to this question.
Temporary workers can also get a realistic feel for how the business runs and can gain strong insight into what “employee” status really means. A company may pay well but they could have a high turnover rate. No one is probably going to admit that during an interview, but attentive contractors could notice this behavior while on the job. Hello, Red Flag, nice to meet you! Being on-site will help temporary workers to determine if a company is right for them. Another downside to contractor positions is that some candidates opt out of consideration because they fear job insecurity. Many job seekers will not leave their current positions for “temp-to-hire” or temporary work.
What Experts Say
According to Workforce Management, “almost 3 million staffing-agency temporary and contract employees report for work each day in the U.S., at a cost of $73 billion a year, according to the latest data from the American Staffing Association. An additional 11.1 million independent contractors work at thousands of U.S. companies. Conservative estimates put contingent employees at 12 percent of the total U.S. workforce.” Experts at Workforce Management also say that the fastest growing contingent worker industry is Information Technology. Global Human Resource officer Libby Sartain is quoted as saying that 10% of Yahoo’s hires are from contingent and temporary workers. Early identification is an intelligent strategy for companies looking for talent. Temporary workers are a part of that strategy.
What a Contractor-Turned-Employee Says
As an employee at a top 10 Fortune 500 company, I successfully transitioned from contractor status to employee. I started as a contractor six months out of college in 2004 and worked my way up the ladder, where I continue to climb. I took the risk of accepting a position that lasted exactly one year. Taking a Contractor position was the best decision I have ever made and it was worth the risks (because it paid off!).
On day 1, I knew that I had to make the most of my time. Adopting the mentality that my one year assignment was an on-the-job interview, I am currently employed by a company that I would like to work at for the rest of my life. Being a contractor opened so many doors that my personal testimony for candidates considering temp-to-hire, is to give the situation some serious thought. There are pros and there are cons. There can be risks and there can be rewards. When you find your place in the world, it is an indescribable feeling. Do not be afraid to take a position if it feels right.
Advice
Three things I have learned about job seeking and employment are:
- Don’t put all of your eggs in one basket
- Don’t burn any bridges
- Treat temporary positions as an on-the-job interview
Stay tuned for my next post in this series for contractor, temporary, and contingent workers titled Contractor and Temporary Worker’s Guide to Getting Hired
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Tags: Career Development, Company, Contractor, JobRelated posts
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