Could contract labour work for you?
Key questions, simplified solutions and tips to tip the scales in your favour.

“If we can’t find the right people to employ or if our schedule of projects won’t accommodate a permanent staff model, perhaps we need to think outside the square. Is that an option? Are there options that might suit us? Will/can the employment market accommodate us as we pursue efficiencies and performance?”
These are three important questions being asked with increasing regularity in business today. In this edition of EPSA’s Industry Trends, we’ll start with just a couple of numbers to give us the lay of the land in terms of contract labour before unpacking some important facts and tips.

3 things to think about while thinking about contract labour

– 2m independent casual workers and business owners

– Latest data indicates that 8.3% of Australia’s workforce is made up of independent contractors with 3.4% on a fixed term contract (ABS August 2022)

– Businesses have been feeling the strain of skills shortages as engineers and contract, program and project administrators feature prominently in the nation’s top 20 occupations in demand nationally

And contract labour could be the answer for many of our businesses. It could be an answer for yours.

Why is demand for contact labour on the up?

There’s an old saying that if you torture numbers long enough, they’ll tell you anything – a cautionary adage to those that take numbers on face value. On the one hand, the “gig economy” and the number of contractors and contract labour businesses in Australia continues to rise. However, the rise is at least due in part to those that are adding a “side hustle” or two to their primary income. So on the face of it we can’t rush to judgement and assume that there’s been a seismic shift from permanent employment to contract labour.

What can be taken on face value is that the embedded shift towards multi-skilled workers and businesses willing to consider or even embrace short term, project bound and/or casual work has risen significantly since the 9 to 5, one or two job career reigned over the employment landscape. Covid taught businesses and workers alike, the necessity and advantages of being nimble, particularly in terms of employment. Those that remember those lessons and continue to leverage them will be best positioned to benefit from and embrace the role contact labour plays in our business sector and beyond.

If Covid and Australia’s recent (and current) uneven journey along the road to economic equilibrium teaches the energy procurement sector anything, it’s this:

In times of rising material and logistics costs, factors within the business that can be controlled, within reason, need to be, for the sake of projections, expenditure controls and commercial continuity. In other words, the stability of the bottom line depends on a business’ ability to complete projects on time in full and within budget.

That’s where a mix of contracted and permanent labour offers advantages to businesses that understand that short term projects, the need for specialist skills, market conditions and volatility in terms of supply and demand, make flexibility in the employment mix, a smart strategy. And one that is more readily accepted by today’s labour force and recruiters alike.

Tips and benefits of contract labour

But what are the benefits to organisations that are fuelling the continued migration to and induction of contract labour? There are two that spring immediately to mind:

– Find people faster

Being able to source and onboard staff expeditiously to focus on and complete a timebound project offers a significant competitive and commercial advantage. You can pinpoint the requisite skillsets, services and timelines, and then select from a pool of applicants or suppliers who are on the same page. Finding the right permanent hires can take 3 months or more. Contract labour and specialist expertise solutions required for complex challenges may well be waiting for your call.

– Agree to agree with more specificity in your labour contracts

Contract labour also allows the company to set specific conditions that insulate the bottom line against certain types of leave and entitlements that come with the permanent hire territory. Taking care to craft an agreement that suits both parties is an advantage that makes organisations more agile and able to counter changes in market conditions and financial circumstances.

The trend that saw contract employment rise by 30% during the decade leading up to 2020, has continued which indicates both a plethora of benefits for employers as well as reflecting preferences of contracted businesses and individuals. So in answer to the question, “will/ can the employment market accommodate your business as you pursue efficiencies and performance? “the answer is yes.