More firms hiring contract workers

Majority feel well-equipped to manage them: Pulse Survey
By Amanda Silliker
|Canadian HR Reporter|Last Updated: 05/17/2012

One of the most important trends in the contemporary workplace is the growing shift towards contingent workers — especially those on contract. While contract workers provide organizations with the flexibility to respond to demand for labour as it changes, they in turn require a more flexible human resources environment, presenting HR managers with new challenges.

But just how well-equipped are HR professionals to manage contract workers? Canadian HR Reporter and the Human Resources Professionals Association (HRPA) conducted a Pulse Survey to find out what policies and procedures firms have in place for contract workers and what trends HR professionals are seeing.

More firms hiring contract workers

HR well-equipped to deal with contract workers (Analysis)

More firms hiring contract workers

By Amanda Silliker

Contract workers are becoming more and more prevalent at organizations, according to the latest Pulse Survey.

Nearly two-thirds (63 per cent) of HR professionals have seen an increase in the number of contract workers employed by their organizations over the past five years, found the survey of 377 Canadian HR Reporter readers and members of the Human Resources Professionals Association (HRPA).

“The overall trend toward contract workers is making a lot of sense given the fact the dynamics of the workforce have changed so much,” said Alison Lennard, director of HR at Stephenson’s Rental Services in Mississauga, Ont. “You’ve got a variety of different generations with different reasons for being in and out of the workforce… looking for contract and looking for flexibility.”

A lot of people enjoy contract work because it is better aligned with their work-life balance needs — such as caring for young children or older parents — than full-time, permanent employment, she said.

And contract work appeals to the younger generations because they are not tied down to one employer.

“We’re going to see the gen Y and the generation coming up after them being interested in contract work because they’re exploring opportunities, they’re testing out employers, which is definitely a characteristic of the gen Y — they’re looking for what they want,” said Lennard.

It looks like this trend will continue, with 40.7 per cent of survey respondents expecting an increase in contract workers at their organizations. And 41 per cent expect to maintain their current situation.

Clear Stream Energy Services in Sherwood Park, Alta., relies heavily on contract workers — who make up 35 per cent of the workforce — due to the nature of its project-based work, said JoAnne Mather, vice-president of HR, health and safety and environment. The 2,000-employee oilfields services company doesn’t know what projects it will be awarded from year to year, so it has many contractors in its database it can call upon.

“Some of the work is 20 days, some can be two months… and the only way to get those folks is to engage them in a contract because you can’t offer them the traditional, long-term employment relationship,” she said. “The work is so variable so a contract situation is what works.”

Contract workers also allow employers to better fill the talent pipeline, said Lennard. If an employee leaves, the company can fill the position with a suitable contract worker who has been performing a similar role.

“We are a very lean organization… so when somebody leaves, we definitely feel the pain,” she said. “Particularly in certain hard-to-recruit-for talent pools, it would be wonderful to take advantage of more flexibility through contract workers.”

Contract workers can also provide additional flexibility for employers such as covering a leave of absence or freeing up some time for staff training, said Lennard.

“It allows permanent employees to grow and develop while someone else is holding down the fort.”

But not everyone agrees contract work is a good idea. Although the YMCA of Greater Toronto has a large percentage of contract workers due to the nature of its programming — such as summer camps and school-year programs — it aims to have as many people in regular employment as possible, said Melanie Laflamme, senior vice-president of HR and organizational development.

“It’s rather a disturbing trend. I know that it’s being done for efficiency reasons and flexibility and to reduce costs but I wonder whether or not we’re creating a workforce of precarious workers,” she said.

The YMCA — which has 3,000 employees — employs many students and invests a lot in training and development. The association often offers student employees a full-time job once they graduate, so its investment is not lost, she said.

One-quarter (24.5 per cent) of HR professionals strongly agreed their organizations have well-defined policies and processes in place to manage contract workers while 40.1 per cent somewhat agreed, found the Pulse Survey.

At 250-employee Stephenson’s, contract workers have a separate health and safety policy to make sure they understand their responsibilities — and to give the company evidence and documentation of this agreement, said Lennard.

“It says to them they have the same responsibilities and accountability for ensuring their own health and safety and that of their co-workers as everybody else in the organization does, and they’re going to be responsible for participating in all the training and requirements that we would have to fulfill a healthy and safe environment.”

Nearly one-half (47.9 per cent) of HR professionals think they are well-equipped to manage contract workers at their organizations and 39.7 per cent think they are somewhat equipped.

The HR team at Clear Stream is working on improving its knowledge of contract workers and how to properly manage them. It is in the process of determining which positions are contract-appropriate and which are not, said Mather.

The company has many items to consider when hiring a contract worker including making sure the contract includes the proper terms and conditions, ensuring the responsibilities of the contract worker are well-defined, and managing the liability and risk, she said.

Nearly one-half (48.4 per cent) of HR professionals think contract workers are less engaged than permanent employees — but 38.3 per cent disagree, found the Pulse Survey.

“I disagree, as long as the company is managing them effectively,” said Lennard. “It is definitely based on the culture of the organization and how well it recognizes that the contributions and the engagement level of a contract worker can be just as significant as a permanent employee if you engage them effectively.”

HR well-equipped to deal with contract workers (Analysis)

Specificity, inclusion and strong policies help with successful management

By Kristina Hidas

While the commentary from HR professionals on this latest Pulse Survey was extensive — and spoke to the complexities of managing a population of contract workers — the numbers reveal a fairly stable picture.

Not only do respondents feel the size of their contingent workforce meets the needs of their organization, they also feel equipped to manage that workforce.

Starting with the number of contract workers in the workplace, the data confirm what we know: Managing a contingent workforce is part of the mandate of a majority of HR professionals. In fact, only 10 per cent of the respondents work at organizations with no contract workers.

While 63 per cent have noticed an increase in the number of contractors employed by their organizations over the past five years, 40 per cent said the increase has not been significant and 27 per cent said the number has remained the same between 2007 and now. Only seven per cent have noticed a decrease.

In terms of managing contract workers, one-half of the survey’s respondents said they feel well-equipped to do so and 40 per cent said they could use more support but still feel equipped. Additionally, two-thirds feel their organizations have well-defined processes and policies in place to manage contract workers.

When asked about the benefits provided to contract workers, respondents were split down the middle — one-half said their organization provides no benefits whatsoever while the balance said contract workers are given some benefits, but not the full range offered to permanent employees.

While 56 per cent said their organization’s needs are being met by the number of contract workers they currently have, one-quarter said it would serve their organizations better to have fewer contract workers.

Regardless of how those surveyed feel about this issue — whether their current number of contractors is working well or there are too many — 40 per cent across the board predicted the number of contract workers at their organizations will only increase in the future, a number that is in keeping with trends across industries in Canada today.

Only 17 per cent of respondents said employers should not blur the lines between permanent employees and contract workers, while 79 per cent said employers should do even more to integrate contractors into the culture of the workplace.

There was a correlation between those who would like to see contractors further integrated and those who foresee an increase in that population at their organizations.

3 strong messages

Three strong messages came out of the comments:

Specificity is good: Contract workers should be hired for a specific project, with a defined start and end-date. This specificity serves everyone — contractors know what is expected of them and what they can, in turn, expect of their employment, as can their co-workers. Many comments said it’s not good for morale when contract employees are kept on for several terms instead of hiring full-time employees.

Inclusion is good: Including contract workers in as many workplace activities, both social and professional, as possible benefits everyone. While some respondents disagreed and called for increased separation between contract workers and the rest of the employee population, a majority stated it’s important — for both employer and employee — to include them in whatever the rest of the workforce is doing.

Policies are good: With the right policies in place, the blend of contract and permanent employees can be successfully managed. These comments were surprising in their volume — while a number of respondents wrote the number of contract workers is a bad trend we should work to reverse, a majority wrote that, properly handled, “contracts are an excellent solution” and contract workers have become a “valuable, adaptable and independent” part of the business — as long as strong policies and a clear understanding of the contract are in place.

Kristina Hidas is vice-president of HR research and development at the Human Resources Professionals Association (HRPA) in Toronto. She can be reached at or (416) 923-2324 ext. 370.

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