The best a manager can get - Managing Contractors

Supply and demand works for contractors, and right now it's a buyer's market. Nicole Gonifas looks at best practice when...

Supply and demand works for contractors, and right now it's a buyer's market. Nicole Gonifas looks at best practice when recruiting and managing today's IT contractors.

If you're an IT manager about to make your first foray into contract recruitment, consider your timing fortunate. Unfavourable market conditions, including job cuts and recruitment freezes among some of the UK's largest technology organisations, have meant that there are presently more good contractors available than before. Which certainly improves your chances of finding the right one for your business requirements.

But before you set the recruitment ball rolling, it is important to ensure your reasons for bringing a contractor on board are sound. A mistake will only waste time and cost your department money. As a general guide, permanent staff are used for strategy and business architecture, while freelancers are hired for specialised project work or time-sensitive developments. Companies also utilise contractors to cover employment shortages within IT departments, to transfer skills to full-time personnel, or to improve performance figures by keeping permanent headcount low.

While it is possible to hire freelancers directly, most companies prefer to outsource the recruitment function to an agency, in order to save time and hassle. According to Simon Churan, UK staffing director of IT recruiter Certes, a good agency should be able to provide its clients with information on contractor rates, skill shortages and availability. It should hold a database of candidates, advertise to fill your vacancy if it can't immediately match your requirements, carefully pre-screen potential candidates, including background and reference checks, and perform technical testing if required.

The agency should also arrange interviews and, once the right candidate has been selected, draw up contracts and offer ongoing support to both parties. "Agencies act as high-speed links to skilled resources," Churan explained. "We will negotiate, mediate, and generally save time on behalf of the client. We provide 'distance' between the end-user and the contractor, thereby reducing the tax and employee benefit liability of the client, and pay the contractor every month. We also deal with all contractual issues, and provide a professional set of terms and conditions."

As with all types of business, however, the quality of recruitment companies can, and does, vary considerably. Veteran agency users advise screening a recruitment firm as you would a potential employee, and suggest seeking out those that best understand the culture of your company and the technology you use.

Rather than focusing on the size of the agency (remember, big is not always best), Alexander Francis director, Shelley Gorys, believes clients should look at how long the company has been in business for, and what its track record is. "Ask what the total sales per employee is within the organisation," she recommended. "Alexander Francis has just eight staff, but each employee brings in in the region of £750,000 a year. Expect excellent service, consider the agency's margins - ours are between 15 and 22 per cent, and we should earn that money - and lastly, if you really want to know the quality of the company, phone in as a candidate and say you'd like to register!"

Accreditation by an industry body, such as the Recruitment and Employment Confederation (REC) can also be useful, as it indicates that the agency has agreed to be bound by a code of conduct to behave ethically and professionally.

Agency issues aside, the whole process of hiring and managing IT contractors will run more smoothly if you've established early on what you're looking for in a contractor. Obviously, his or her technical knowledge, ability, and previous experience will be key, but there are other factors which may influence your working relationship, or affect the successful completion of a project. For Neil Argent, head of IT business systems support at publishing house Reed Business Information, a contractor's 'personality fit' is as important as his technical expertise. "Personality fit is vital," explained Argent. "Even if the contractor is only with us for a short period of time, he needs to become an integral part of the team, and so must be trusted by other members of staff. He also needs to be able to communicate well with others, and give and receive feedback." Additional matters to take account of include the freelancer's willingness to deliver the work as agreed, his flexibility, problem-solving skills, and attitude to supervision.

Although contractors do value their autonomy, it would be a mistake to assume that once they've been briefed on the role, they can be left to their own devices. Particularly because they do not have the luxury of a 'settling in period', freelancers need care and attention, in the early days of a contract at least. A good manager will therefore provide clear direction, and agree a set of structured goals with the contractor. He will also monitor and track performance and liase with the freelancer daily to ensure there are no problems. "It is worth the extra investment you make in terms of your time and energy to ensure that contractors are fitting in nicely," commented Argent. "It improves your relationship, and you get more out of them."

Because reputations count for a lot in the contracting world, problems with freelancers on-site are rare. However, tensions can occur between permanent and contract staff, typically when there is resentment about the amount of money the freelancer is being paid (although such details should be kept strictly confidential), or the contractor is not seen to be pulling his weight. Weak technical skills, or unsatisfactory levels of productivity or absenteeism, can also pose problems, as might poor time keeping on the part of the contractor, browsing the Internet, handling personal e-mails at work, and a failure to follow instructions.

In the unlikely event that the problem proves to be insurmountable, clients will generally have a clause enabling them to terminate a contract. But, when addressing conflict situations, managers are advised to always involve the agency, particularly if the problem is an ongoing one. Adam Fletcher, director of consultant services at Computer People, says the agent remains the intermediary between client and freelancer for the duration of the contract, and as such, should play an active role in resolving any difficulties. "Issues should be few and far between, especially if the agent is managing the assignment properly and is close to both parties, but part of our success at Computer People is that we make problem resolution an absolute priority."

Boxtext: case study
Computer services group, ICL uses contractors to perform a variety of functions in its IT department, from helpdesk support and testing, to software development, database design, and project management.

At present, approximately 900 of its 12,500 staff in the UK and Ireland are contract personnel, working on assignments of varying length, from three months upwards.

ICL's recruitment methods are in some ways unique. The organisation has its own in-house agency, IT Contractor Services (ITCS), and prefers to deal directly with freelancers via their personal service companies. It advertises vacancies on numerous web-based job boards and has built up its own database of contractors, but will engage the services of preferred supplier agencies when necessary. In this way, ICL manages to keep its recruitment costs down, as well as maintain much closer control over contractors and how they are used.

Cathy Doyle, supplier manager of the division, says contractors are tasked and managed according to the project at hand. Wherever possible however, specific deliverables or a work schedule will be set, and then monitored.

She advises IT managers looking to take on freelance staff to ensure in the first instance that contractors are the most appropriate and cost-effective solution, and that only reputable agencies are used to source them. Doyle also warns against allowing contractors to become indispensable, so that the company is not 'held to ransom' over rates paid or contract extensions.

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