What is contract recruitment?


Contract work is employment that supports a specific project or an organisation, usually due to the immediate need for extra resource.

Contract work is employment that supports a specific project or an organisation, usually due to the immediate need for extra resource. Unlike permanent employment, this type of work takes place for a predetermined period, with the potential to extend the contract if required.

A contract position fills in the gaps in a company’s workforce, solving skills shortages. Hiring temporary staff through short-term contracts is becoming an increasingly popular part of staffing management for employers. A contract worker is different to an independent contractor in that independent contractors are self-employed and responsible for their own taxes and expenses.

History of contract recruitment

Traditionally, companies employed their entire workforces on a permanent basis, but in recent decades, a contract employment model has emerged that aims to provide organisations with the skills they need for limited periods to handle times of intense work volume or finite projects.

Contracts are signed with independent workers for a defined period. At the end of that time, the employer has no further obligation and vice versa. In sectors like IT and life sciences, a large pool of contractors with experience working with a range of clients and technologies has grown rapidly.

Recent contracting trends

Skills shortages combined with key global megatrends including digitalisation, decarbonisation, healthcare innovation, new working models and generational shifts, have accelerated demand for contractors. Companies that are unable to find the expertise they need are seeking out highly skilled short- and long-term contract staff.

The pace of technological change was further increased by the Covid-19 pandemic and the shift to remote and hybrid working. This has meant that some skills have been in very short supply and companies have turned to contract workers to help them tackle these challenges. Demand for everything from mobile technology to medical device technology has grown because of the pandemic and increased the need for associated skills.

Yet in the current market, mastery of a core technical skill is no longer enough contractors to win the best contracts. Employers are looking for a combination of skills and abilities. Software developers, for example, may also need communication and business experience. The same is true in engineering where traditional engineering skills may need to be supplemented with technology know-how because tech is now embedded into so much of what is created.

Advantages of contract recruitment

Contract recruitment offers both parties (the employer and contractor) flexibility. It is a mutually beneficial exchange of work and problem solving. It’s also less risky for the employer than hiring permanent staff. It can be a good option to cover positions that may be difficult to fill permanently.

Contracting can also be a good deal for professionals. They often enjoy higher levels of pay than permanent staff and greater freedom to pick and choose their projects. And while contracts can be lucrative, money isn’t the only attraction. Choosing interesting contracts that use the latest techniques and technologies in buoyant sectors can equip contractors for future projects and enhance their earning power.

Disadvantages of contract recruitment

While contractors provide a flexible workforce, they can also be expensive and their knowledge is not retained within the business when the contract ends unless it has been comprehensively shared. There can also be costs associated with the infrastructure required to make onboarding smooth.

Contractors themselves also face some disadvantages. Contract positions are less secure than permanent roles. In addition, they don’t enjoy the same workplace benefits as permanent staff, such as paid leave and health insurance. Recently, the tax position of contractors has also come under more scrutiny from several governments, which has made contracting more complex and has led some to move to an employed contractor model, where they are employed by a third party like SThree for the duration of their projects.