Project workers are nothing new, but more and more companies are discovering the flexibility and bench strength they can offer.
Employers that use project workers often find it a win-win situation. They can capitalize on the skills that contract staff bring to the workplace without the commitment of hiring more permanent employees. While this practice can be a plus in terms of flexibility, it also brings new challenges for HR professionals. Without proper management focus, the contributions made by contract workers may fall short of their full potential for benefiting the organization.
Long a staple with military contractors, technology companies and consulting firms, project workers are also used by many other types of employers. And their popularity seems to be growing. In a February survey conducted by HotGigs.com, a Minneapolis-based firm serving as a marketplace for contract labor, 30 percent of employers expected to use 5 percent more contract resources in 2006, and 20 percent projected an increase of 10 percent or more.
Perhaps the most common rationale for turning to such workers is to handle temporary increases in business activity.
"We use contract workers on a consistent basis throughout the year to provide surge support for our projects," says Debbie R. Norris, vice president of human resources for Merrick & Co., a design and engineering firm headquartered in Aurora, Colo. "It is easier to utilize contract workers for short projects rather than having to lay off a full-time employee because the work isn't there."
At Merrick, the most frequent demands for contract workers are for design engineers or technical designers. Typically, they are retained for periods of up to nine months to support the core team on a given project.
With some employers, the flexibility provided through contract staffing has led to project workers becoming a standard part of the personnel mix.
"The ability to augment the traditional workforce with contingent labor allows companies to be more agile and effective in meeting the needs of their customers," says Joanne McCool, a San Francisco-based general manager of the Professional Services division at Primavera, a project and portfolio-management software company headquartered in Bala Cynwyd, Pa. She says that in the past, companies typically used contractors in a tactical fashion when they were under pressure to do so.
"Today, many of our customers have expanded their contractor usage into the broader context of strategic workforce planning," McCool says. "They are moving away from ad-hoc contractor use and toward creation of a repeatable and disciplined process for making staffing decisions that lead to strategic results."
Along with meeting demands due to growth or the undertaking of large-scale projects, project workers may also provide valuable levels of expertise.
"Many of our clients utilize contract workers extensively to augment permanent staff for large business and IT initiatives," says John Henning, director of business development at Granite Solutions Groupe, a recruiting-firm based in Placerville, Calif.
"In particular, we have found that our global financial services clients are currently faced with large staffing demands as a result of upgrading their core investment platforms and would rather utilize contract workers than add to permanent staff. They have also found that the level of expertise in the consulting market is much higher than that which they can find for permanent positions."
With reliance on contract workers comes the need to provide effective management. Helping workers adjust to the organization seems to be a key, along with fostering their overall integration.
"Many companies could do better at acclimating workers," says Patrick Gray, president of Prevoyance Group, a New York consulting firm. "They are often hired in a hurry, and whisked out to the project with much haste, only to sit around and bill for a week before anyone has the time to talk with them."
Gray advocates basic measures such as creating a "new team member" binder with background on the project, organizational charts and other information.
For those brought in from outside the area, it might also include information on restaurants, shopping and other essentials.
"When done effectively, this allows new team members to ramp up in a day or two without occupying another resource's time to get them up to speed," he says.
Primavera's McCool says that since contractors are no longer an anomaly within the workforce, their acclimation should follow a set of standard processes.
"Human resources departments must have an active role in the planning and recruitment of contingent labor to facilitate this adaptation," she says. "HR must also be able to demonstrate how contractors are performing, which skill sets are in heavy demand, which skill sets are unavailable in-house, and identify sourcing and training plans to align staffing with strategic goals."
She says that getting contractors off to a quick start should be a primary concern.
"This process begins with establishing centralized knowledge repositories and clear project charters," she says. "Such information enables contractors to quickly understand what is expected of them, what has occurred prior to their arrival and the desired outcome of their work."
Perhaps the most important factor in integrating workers is fostering a spirit of teamwork, according to Henning.
"Our clients typically place contract workers directly on teams with permanent employees and fully integrate them to the environment as if they were regular employees," he says. "This empowers the workers to commit fully to the organization and project objectives and improves retention rates for high-quality workers."
Certainly, the type and degree of management oversight can vary widely. And some workers will be more readily integrated than others.
"There is a very broad scope of work a company might hire a contractor to do," says Jon Wheeler, a partner in the Clarion Group, a consulting firm based in West Hartford, Conn. "It could range from being an extra pair of hands doing manual labor to providing strategic advice to senior leadership."
Wheeler says that for a simple matter of extra help, management systems and strategies are typically task focused and short term, and little investment in the contract worker is made. But for more complex contributions, more integration is needed.
"If the contract work is part of an outsourcing contract, then investments in assimilation are made in the contractor by bringing them to the planning table so that services can be customized and integrated into the company," he says. "If the work is strategic advice, substantial investment must be made so that the advisor can be knowledgeable enough to provide advice."
Once workers have begun the integration process, effective evaluation is critical.
"It is important that performance is evaluated regularly against defined goals with clearly communicated critical success factors," McCool says. "This should include review of an individual's performance at multiple times during the contactor's assignment at the company."
She says that along with individual evaluations, assessing strategic performance of sourcing partners is also important. This might include measuring of indicators such as cost improvement, operations improvement and business improvement.
"By putting in place a method for clear measurement against these key performance indicators, HR departments can easily understand how their sourcing partners are performing and where changes need to be made to achieve strategic workforce optimization," McCool points out.
Those experienced with managing project workers recommend a central human resources role early in the process.
"To accomplish true workforce optimization, HR needs to be involved with the decision-making process at the outset," McCool says. "It is critical to develop and implement a sourcing strategy based on past performance, future business objectives and key performance indicators."
Once the decision has been made to use contract workers, due attention should also be given to making the right choices in their selection. "Don't be afraid to use current consultants and even on-site interviews to ensure you get the best resources," Gray says. "HR folks often balk at flying out a temporary worker for interviews, then spend tens of thousands of dollars having an ineffective person on site for months on end."
Planning for use of project workers should also include training for managers in the best ways to manage them, according to Henning.
"It's important to help managers understand the difference between hiring contractors and full-time employees," he says.
"Lengthy interview cycles will result in the loss of the best candidates, and hiring managers should remember that if workers don't perform to expectations, they can always let them go."
He adds that the short-term nature of contract work supports a very pragmatic approach, when appropriate.
"Not everyone has to like the contractor," he says. "The worker just needs to be capable of completing the task at hand and delivering the expertise or skill set needed by the organization at the time."
Once work is completed, a consideration that should not be overlooked is continuity of information and processes.
"Without proper systems in place to capture successful work done by contractors, the contractors often take knowledge and processes with them when they leave a project or a company," says McCool.
"This brain drain can cost the project or the company significant time and money."
To head off such problems, broad-based communication should be the norm throughout the life of any project, and both project workers and their managers should document results.
In addition, an over-reliance on contract workers should be avoided.
At the same time, when managed well, the use of project workers can help organizations meet changing needs in cost-effective ways.
"Contingent labor offers a good solution to address the peaks and valleys of a company's workload," says McCool. "It can also ensure that the company is performing optimally without overspending to accomplish goals."