When hiring contractors, employers are constantly seeking the optimal way for sourcing, engaging and retaining talent, in the most efficient and effective way possible.
As we’ve discussed recently, employers are experiencing a significant talent shortage across all industries and increased difficulty in finding the workers with the skills they need. To remain competitive in today’s fierce business landscape, businesses need to keep hold of the workers they know can perform.
Companies usually hire contractors in one of two ways: whether they’re hiring unknown talent or known talent.
Out of both unknown and known talent, the latter is by far the better option for organisations looking to improve retention and performance of their contractors.
Below, we outline the importance of finding known talent, cutting-edge solutions organisations are using to source contractors and how online talent marketplaces can help.
Stemming the talent drain
Experts estimate that nearly 4 million baby boomers will leave the workforce in the next 10–20 years. Coupled with this, 86% of managers are concerned with how the departure of these workers will affect the availability of skills.
Although organisations might have a healthy pipeline of new graduates, if they start to lose their skilled personnel in the middle – the crucial 30–50 year old professionals – they’re going to start seeing a severe loss of intellectual property and experience.
That’s not to mention the significant costs associated with finding and retraining a new worker. When replacing a person, it can take one or two years before they can get to the same productivity level as the previous resource. According to SHRM reports, direct replacement costs can cost as much as 60% of a worker’s yearly pay, and even up to 200% for total costs associated with turnover.
That’s why companies invest so much into retention programs in an effort to cling desperately to skilled talent. Companies have not, to the same extent, prepared as well for workers leaving the company and coming back at a later date.
Contractors, by their definition, are a contingent resource that businesses can draw upon when needed. Employers need to ensure, however, that the significant intellectual knowledge held by contractors doesn’t evaporate when their contract comes to an end.
The way we conduct work is changing. Workers are looking for increased flexibility and a job that works around their lifestyle. Employers should ask themselves:
Does our talent engagement model align with expectations of workers?
Is our business set up to reengage workers if they want a career break?
What happens when a skilled professional leaves our company?
Are we prepared to fill the hole left by retiring workers?
When a large portion of a workforce is set to vacate the workforce, organisations need to start implementing strategies to retain that knowledge. The best way they can do that is through known, proven talent.
The benefits of ‘known’ talent
We consider talent that has been previously employed in your company, or with an organisation you trust, to be superior to unknown talent. When employing proven, experienced workers, with demonstrable experience and qualifications, you take much of the uncertainty out of the hiring process.
Known talent can encompass a number of different types of worker, from previous employees, alumni contractors and ‘silver medal’ candidates – that is, workers who have previously interviewed for positions but were not selected.
Previously, when a contractor left a company, that’s where the relationship would end. Organisations are now starting to pay attention to the significant benefits associated with developing programs that reengage these known workers.
Some of the key benefits with engaging known talent include:
According to a recent MIT Sloan Management Review article, ‘when employees depart for other destinations, relationships built with them can be nurtured, expanded and leveraged to help the company garner key resources in the future’.
By hiring known contractors, employers can save significantly on external recruiters and the internal effort involved in the recruitment process. Rehiring contractors can be two-thirds cheaper than hiring new contractors.
How can we find known talent?
Traditionally, contractors have been engaged and sourced through recruitment suppliers, consultancies, job board advertising and direct engagements with professional service providers, which attracts additional costs associated to margin. Organisations are now shifting towards identifying candidates for available opportunities using their own knowledge and networks resulting in reduced costs.
We’ve outlined some of these emerging methods for employing known contractors below:
In a recent Ardent Partners report, 54% of companies currently use previously engaged workers as a core component of their contingent sourcing strategy, with an additional 61% expected to use private talent pools in the future.
Providing access to known talent through Workforce Exchange
CXC manages around 9,000 workers every year for a number of large corporate clients, including Medibank, Origin Energy, Deloitte and Macquarie Bank. Through a recent survey, we found many of these contractors placed a great deal of importance on job security and future contracting opportunities.
Contractors, upon completion of their assignment with a client, wanted further quality assignments with other CXC clients. There was also a demand from our clients to provide known, proven talent to fill niche roles.
CXC’s Workforce Exchange (WEX) was designed to meet these two goals. WEX is a talent community designed to give organisations access to our 9,000 proven and pre-qualified contractors from a variety of industries and skill sets. Our team matches our client’s job requirements with the skillsets of our contractors based on their employment history with CXC.
All contractors have undertaken CXC’s extensive compliance onboarding process, significantly reducing the time to hire. Additionally, our fee sharing model is significantly lower than the cost to source an agency contractor.
Are you experiencing difficulty filling niche roles? Accessing proven contractors through our talent community might be the answer for you.
As one of the world’s leading providers of contingent worker management solutions, CXC is well positioned to optimise all elements of your contingent workforce strategy. With operations in more than 50 countries across five continents and decades of experience, we can assist with every aspect of your program.
If you would like to find out more about how we can help please contact us here.