Pros and cons of using contract staff

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Pros and cons of using contract staff

Tight managerial control along with a clear plan on what is required of contractors is the key to successfully employing temporary staff.

Contract staff are often used to solve skills shortfalls, but the danger is that they can become part of the furniture.

David Taylor, president of IT directors association Certus, warns, "Organisations tend to hire contractors for six months. They can still be there a year later, with no one really sure what he or she is supposed to do."

It is therefore important at an early stage to decide the reasons why the contractors are being employed.

Mike Cullen, chairman of the Computer Contractors Group, defines four areas where contract staff are often used:

  • On time-limited project work.

  • When implementing new technology without training.

  • When permanent staff move on to other tasks but dead skills are still required until a particular task is phased out.

  • During cyclical swings in the market which cause a skills shortage.

    Cullen's analysis suggests that use of contract staff is no more or less costly in the long run than using permanent staff. "When all the costs are taken into account, there is little difference between employing permanent staff or contractors, though this may change after three years," says Cullen.

    After making the decision that contractors are needed and setting the criteria for employing them, the next stage is sourcing the staff required.

    A recruitment agency is the best method of obtaining contract staff - especially if needed in large numbers or if specialist skills are required.

    A good agency will hold a database of candidates and can offer the IT directors advice about contractor rates and specialist markets. It can also set up an interviewing process and draw up contracts as required. "The best agencies will screen out those staff that are not acceptable," says Cullen.

    Taylor offers three tips for agency selection. "First, choose an agency that understands your business, your clients and the problems they face. Second, speak to an agency's customer for an experienced viewpoint. Finally, look for an agency that can supply contractors with solid interpersonal and sales skills as well as technical knowledge."

    A good idea is to check the agency's credentials with the two regulatory bodies - the Recruitment and Employment Confederation and the Association of Technology Staffing Companies - that govern the industry.

    If these steps are clearly followed then usually the relationship between IT manager and contractor progresses harmoniously. But what of those occasions when things go wrong and severance of the contract is the only option?

    Roger Sinclair, a partner at legal practice Egos, believes the ease with which contractors can be removed depends on the contract. He recommends that a notice period should be specified to cover eventualities such as a contract finishing early or the need to grant gardening leave where damage could be done to the company if the contractor remained on site.

    Cullen says the standard contract will have a two-day notice period for the first month and a month thereafter. If difficulties develop, the recruitment agency is regarded as the first port of call to attempt to achieve resolution.

    With the government changes in IR35 likely to create a skills shortage, the most likely problem to face managers in the future will be that of finding appropriate contract staff.


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    This was first published in May 2000

     

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