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Flexibility: The top reason workers choose contracting

Agility. That’s the name of the game for businesses these days, and it’s why leveraging a contingent workforce for some or all operations is so appealing. And, as it turns out, flexibility is particularly attractive to workers. In fact, it’s one of the main reasons they choose these roles.

What is the contingent workforce?

28 per cent of Australian workers are casual or contractors.

Contingent workers are individuals who work for an organisation on a temporary basis, often employed for specific tasks or time periods (such as during regular employee’s maternity leave). This category includes freelancers, temps, contractors, independent contractors, consultants and on-hired individuals. They’re typically paid on an hourly basis and, because they don’t receive the full range of employee entitlements such as paid leave, they may enjoy a higher rate, known as casual loading. Alternatively, they may be hired under contracting arrangements, with the engagement centred on project outcomes.

In Australia, about 28 per cent of workers falls into this category, according to the Australian Bureau of Statistics*. A report from the Manpower Group** placed Australia 15th worldwide for contingent workforce engagement. However, the firm also found that Australia’s regulations for the segment are among the best in the world, placing the country fourth. That means Australia has a fairly attractive landscape for individuals to engage in these arrangements.

For host organisations, working with contingent employees offers a number of benefits. Research from Robert Walters*** surveying more than 300 hiring managers and 2,000 professionals in New Zealand and Australia revealed that employers choose these arrangements to:

  • Fill talent gaps with highly skilled and specialised staff
  • Supply labour for short-term projects cost effectively
  • Have greater flexibility in their workforce to scale with demand
  • Keep headcounts down amidst economic uncertainty

Similarly, Deloitte**** found that businesses around the globe are turning to contingent workers to address a competitive hiring landscape as baby boomers retire, whilst increasing the agility and responsiveness of their workforce. The firm revealed that larger companies may be spending up to 30 per cent of their procurement spend on these arrangements, while others have more contingent workers than regular employees. As labour costs rise, having a workforce that can quickly respond to market conditions is a competitive advantage.

 Why do people choose temporary roles?  

To better understand this vital workforce sector in Australia, WorkPro – a specialist in employee inductions and work health and safety training – conducted a series of surveys to ‘take the pulse’ and gather information about what leads people to engage in temping or contracting, as well as on-hire workers’ understanding of their rights and responsibilities.

How do contingent workers fit into the wider workforce?
How do contingent workers fit into the wider workforce?

The first survey was conducted in November 2011. The opt-in poll had a sample of 2,328 contractors and temporary employees who were applying for work in Australia through various recruitment agencies. The second took place just over three years later, in January 2015, polling 8,157 respondents who chose to submit answers to the survey. Both surveys took place before workers began work health and safety inductions specific to their roles as temporary or on-hired contractors.

Both surveys revealed a generally positive attitude towards this form of employment. The key reason workers choose these roles?

  • Flexibility (36 per cent)
  • Variety of work (30 per cent)
  • Pay (14 per cent in 2011, 12 per cent in 2015)

Although most responses showed people chose the arrangements to suit their needs and preferences, some participants indicated it was more a matter of necessity than choice.

These results align with other research in the industry. For example, Robert Walters revealed similar ‘upsides of contracting’ for their survey respondents:

  • Varied experiences with no required commitment (41 per cent)
  • Higher pay rates (36 per cent)
  • Improved work/ life balance (14 per cent)

However, while Robert Walters found that many contractors encountered difficulties at the induction phase, such as not receiving pertinent information or introductions, WorkPro’s survey sample was generally pleased with the process they’d had. For instance, 90 per cent of respondents in 2015 said they were satisfied with the information they’d received from employers, up from 87 per cent in 2011. Furthermore, the number who said they are ‘fully aware’ of their obligations and entitlements grew over the four years from 70 per cent in 2011 to 77 per cent in 2015.

Are WHS concerns being met? 

74 per cent of respondents feel as safe as permanent employees.

Given the shared responsibilities on-hire agencies and host organisations have for contingent employees’ work health and safety, WorkPro polled respondents about their experiences and beliefs in this matter. Traditionally, the triangular relationship has caused some confusion, and there’s an ongoing belief that the arrangements may not be as safe as permanent employment.

WorkPro’s surveys revealed that most (92 per cent) respondents were aware that multiple parties are involved in their work health and safety, and nearly three quarters (74 per cent) said they felt they weren’t at greater risk than their permanent counterparts. As such, contractors being inducted and trained through an online module felt their employers were doing a consistent job informing the entire workforce. In contrast, Robert Walters found that 55 per cent of contingent workers felt they received different treatment from permanent employees, albeit in a more general sense.

Key steps for on-hire firms to keep in mind include:

  • Attaining clear, detailed specifications for the job and associated tasks
  • Communicating industry-related hazards and best practices for the particular working environment
  • Providing onboarding and induction processes to help individuals become familiar with the organisation and its workers
  • Conducting site assessments, in person or remotely, to ensure conditions are safe
  • Coordinating with the host organisation on training and providing protective equipment

As more businesses turn to contingent workers to fill talent gaps and create more responsiveness in their workforces, and as individuals pursue these roles for flexible arrangements they can tailor to their lifestyle, it will only be more important for organisations to have a proactive, streamlined plan in place to keep all staff – temporary and permanent – on the same page and informed on entitlements and WHS considerations.

To assist with these needs, WorkPro offers a labour hire checklist, an on-hired worker induction course and other resources for labour firms and host organisations. For additional information about managing WHS for contractors in on-hire, download WorkPro’s free e-book or contact us today.

*Australian Bureau of Statistics, “Forms of Employment, Australia, November 2013”.

**Manpower Group, “Contingent Workforce Index: 2014 Global Analysis”.

***Robert Walters, “Leveraging the Contingent Workforce”.

****Deloitte, “Contingent Workforce”.

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