By Ana Sherman
The growing number of freelancers or contracted temporary workers in the United States has stirred an open and ongoing dialogue on how this trend is impacting the workforce. As of July 2015, over one third of all Americans do some sort of freelance work. That number has grown by 10 million in the last year alone. When polling millennials specifically, the number who freelance or are self-employed independent contractors rises by more than five percent.
The Bureau of Labor Statistics expects the number of freelancers and independent contractors among millennials and the general population alike will grow significantly over the next five to seven years, predicting that by 2022, roughly 40 percent of the labor force in the United States will come from freelance or independently contracted work.
The appeals of working as a temporary contractor are straightforward: freelancers set their own schedule, work where they want to work, can work multiple projects for multiple clients, and can be very flexible. Can the traditional culture of employers offering jobs requiring security clearances, secure work facilities, and scheduled federal contracts get on board with this trend?
Cleared to… Freelance
Surprisingly, not only are they already on board, they are finding that in certain circumstances, hiring temporarily contracted workers is just smart business practice.
“There are a number of benefits to hiring an independent contractor. First the company does not have to carry the associated cost of ‘extra’ benefits. Second, if the program runs in cycles and we see the ramp up and ramp down of a contract, it is much easier to manage that with an independent contractor rather than a salaried employee,” said Aaron Turner, Talent Acquisition Manager at Engility Corporation.
With the increased amount of contract awards going to LPTA bids (Lowest Price, Technically Acceptable), those “extra” benefits (PTO, health insurance, unemployment taxes to name a few) could be shaved off the employers’ overhead cost, allowing the company to reflect those savings in the lower bid. More contracts are now being awarded for shorter spans – many for a year or less – and sometimes without an option to extend. Hiring independently contracted employees reduces the chance of having to hire a full-time employee, only to lay them off due to the close of a contract a short time later.
Another benefit, notes Maria Whitney, Senior Recruiter for Smartronix, has to do with salary. “If our salary range is not within the independent contractor’s range, it may be cost effective to hire them as a [temporary contractor] rather than an employee.” Hiring an independent contractor to perform part of an employer’s project allows the employer to keep and bill their rate, while potentially paying the temporary contractor less than what they are billing their client.
Despite Benefits, Preference for Full-time Workers Remains
While there are numerous benefits to hiring contingent workers in the cleared community, the talent acquisition managers we spoke with overwhelmingly agreed that the preference is still for full-time salaried employees. Gary Goss, Recruiting Manager for Software Professional Solutions tells us their use of independent contractors is for episodic support that may be two to three months long and occur one to two times a year.
Engility’s Turner agrees. “We typically prefer to hire individuals as W-2 salaried employees when and if possible, but in some cases we do hire independent contractors…if we have a need that is only anticipated to last a short term.” Turner adds that Engility approaches each circumstance on a case-by-case basis.
Reacting to the Rise of the Temporary Worker
Employers are aware, however, that more employees are after what freelancing offers- flexibility. All of our recruiters noted the growing demand, particularly from millennials, for working outside of the traditional 9-5 office environment.
Many employers are moving entire contracts and projects 100 percent remote, cutting the cost of a commute for the employee, and cutting cost of providing a work space for employers.
“I would say the flexibility to work remote is tenfold what it was five years ago, and certainly what it was 10 years ago,” notes Turner.
Maria Whitney adds, “Smartronix specifically gears our benefits package towards this growing trend with a great work-life balance we attribute to our PTO [Paid Time Off] and flexible work schedules.”
Despite all the demand for flexibility, cleared employees understand that you can’t do classified work from home, which means there is often some requirement for on-site time.
“It’s tricky within the intelligence community,” says Dave Sterling, Founder/CEO at Royce Geospatial Consultants, Inc. “A lot of the work has to be performed onsite due to the sensitive nature of the work.” Despite that requirement, even the IC is making strides toward making flexible work sites an option, through leveraging open source software and technology and allowing some of that development to take place in unclassified environments.
Contingent workers will continue to be sought after for the strategy, expertise and experience they can lend in niche areas. The trend of employees wanting to be their own boss will continue to grow, and while freelance and contract work isn’t going anywhere, employers in our industry are making strides in offering their employees the same flexibility freelancers are after.
Tips for creating a freelance friendly workplace
It’s clear – the number of temporary and contract workers will only continue to rise. And while it’s a change, it’s a phenomenon that can benefit your recruiting program and your bottom line.
- Make work-life balance a priority.
This is critical. All workers today value flexibility. Even if remote work isn’t an option, consider how you can increase an employee’s flexibility. In competitive industries such as cybersecurity, we’re seeing such perks as unlimited time off, paternity leave benefits, and more. Think about what would add value to your most in-demand hires, and how you can offer it.
- Consider ‘no’s’ to a full-time job a potential ‘yes’ for contract work.
Keep a folder in your talent pipeline specifically for candidates who may be a great fit for contract work. These may be individuals who have been laid off in the past, who left your company for other positions, or who were responsive, but simply not interested at the time of your initial offer. Ask if these individuals may be open to contract work at some point (many are), and then bring them on board for a temporary project. That might be the best way to lure them into a full-time position.
- Encourage flexible schedules.
This can be a critical strategy to attract the contract employee. Whether it’s four 10-hour days, an every-other-Friday-off schedule, or simply the flexibility to schedule your own work-day, whether it’s 6-3 or 9-6. Giving employees a little autonomy on when they arrive at work can give them the feeling of a consultant with the job security of a full-time employee.
- Treat your contractors well.
In some companies, consultants are treated like second-tier citizens. Yes, they aren’t actual employees of your company. But if you’re hiring good consultants (and you should be), you should be proud of having those employees affiliated with your brand. Treat them well, and they’ll treat you well – with loyalty, quick response, and helping spread the word about your amazing company.