The Rise of the Contract Worker
May 16, 2018 12:41PM
By Cole Epley
Employees in Midwestern cities like Omaha are less likely to work side gigs than are their counterparts elsewhere in the United States, and they’re among the least likely in the country to have changed jobs in the last two years.
Still, 15 percent of Midwestern employees surveyed in late 2017 for an NPR/Marist poll indicated that they identify as contract workers—those hired guns brought on to complete a specific project, or for a specific period of time.
While lower than the rate of 21-23 percent of workers who identified as such in other regions and the 20 percent figure nationally, that number is changing how employers hire, what they offer prospective employees in the way of benefits, and, some local experts say, how or if they can grow their businesses.
Erin Isenhart enjoys working as a contract employee. The sole proprietor of Yellow House Creative has spent the last five years bouncing from one contract to the next.
She says one client, Joe Pittman of Omaha-based Creative Association Management, has asked “many times” about coming to work for his organization, which works with various industry associations. But Isenhart says she prefers the flexibility of building on her existing relationship with Pittman and his clients, for which she manages projects like social media marketing, website maintenance and creation, and event planning. She also says her decision to stay independent is a form of mitigating the risk of something like an unexpected layoff—a fate she’s experienced too many times already.
“I could just work full-time for him, but as a contractor, you don’t want all your eggs in one basket,” Isenhart says.
Contractual work may also be a plus for many companies. In late March, Virginia Kiviranta of My Staff said she could hardly believe the volume of contractors in the Omaha office of a 300-employee government services client.
“They had 50 contractors on site and that’s the most I’ve ever seen them have,” said Kiviranta, who is a partner with Brad Jones at the Omaha-based staffing company. “I don’t know where they’re putting everyone. I didn’t think they have that much space.”
Government contracting by nature is project-driven, but step back and consider the tight labor market in general: Midwestern companies, on average, took nearly 32 days to fill an opening in January, according to the latest data from New York-based DHI Group Inc. The company uses data from its careers website combined with federal jobs data to derive a picture of about how long it takes to fill a job opening. Its time-to-hire index in January was more than double the duration of the same period in January 2009, when the recession was ravaging the economy and employers were slashing workforces.
A press release from Stanford University’s Hoover Institution states that, “Many vacancy postings for skill-intensive jobs draw few applicants, in line with employer claims that talent is scarce. Yet the typical jobseeker competes with many, many rivals for desired jobs. The upshot is that labor markets are both tight (for employers) and slack (for workers) at the same time.”
In other words, that means current conditions are indicative of a job-hunter’s market—especially for one with desirable skills. And that can pose a problem for a company trying to hire top talent.
“A lot of small businesses just don’t have a huge office, they don’t have a place to put everybody, and that’s costly,” says Isenhart. “Then when it comes to paying for insurance and any of the different benefits, it’s just not in their budget.”
Todd Murphy, CEO of Universal Information Services, takes a different view.
“The gig economy, and its related employees, is great in that it allows employers to use a flexible work force,” Murphy says. “The downside is that if you need ongoing support from someone, they may be busy on another project. I’ve also seen a person go from working gigs to being a full-time employee. This can have the same outcome in that they become unavailable for continued support or development.”
So, with a tight labor market for employers, local staffing professionals say a combination of contractors and temp-to-hire employees may be a good approach for staffing solutions.
“For the temp employees we put out to our clients, if there is a longer-term need than just a short three-to-six-month project, those [temp] individuals are the frontrunners to take those positions,” says Josh Boesch, shareholder at Lutz Talent, which specializes in finding employees for the accounting and finance industries. “The temporary employees oftentimes are performing working interviews, whereas a typical applicant or candidate for a job may only get an hour or a half hour to attempt to impress the hiring manager.”
Brian Smith spent almost a decade in retail banking before focusing on marketing; now, he works on a contract basis with political candidates and corporate clients as a consultant. Unlike Isenhart or other industry-specific contractors, he says he’s on a more fluid course and is currently angling to work with municipalities on urban innovation initiatives.
And with the right combination of contract work and flexibility, he may well reach his goal.
This article was printed in the June/July 2018 edition of B2B.