One of the key considerations for a budding entrepreneur must be the people he or she wants to bring on the journey with them. Global trends in employee engagement practices could provide just the solution to suit a start-up environment.
At present it is estimated that 20-30% of the American workforce is comprised of temporary and contract workers. Some analysts predict that this figure will rise as high as 50% in coming years. While European norms may not exactly reflect the situation in the US it is reasonable to say that these trends tend to follow similar paths either side of the Atlantic. Ireland’s reliance on US Foreign Direct Investment means that US trends tend to be replicated more acutely here.
In the context of a start-up looking for talent there are a number of reasons why they may benefit from choosing a Temporary or Contract employee, namely:
1. Reduced overheads
If engaging a person on a full time basis there are associated employment costs of carrying this headcount on an on-going basis e.g. employers PRSI. As finances may be tight in the early stages of a fledgling venture the burden of these recurring costs may be problematical.
2. Flexible engagement model
Many hiring requirements nowadays are project based i.e. there is a need for example to develop a specific piece of code, produce a particular piece of marketing collateral etc. Instead of the burden of carrying the full-time cost for these resources the start up could engage people on a project and time-specific basis and discontinue their services on completion.
3. Flexibility to scale
A further advantage is the ability to scale up and down quickly. The process of hiring people on a permanent basis is generally a more elongated process. The beauty of the contingent model is that many ‘career contractors’ are available on shorter notice periods and as they are being engaged for specific purpose work there is less of an onus on exploring the cultural fit and motivational fit than there would while hiring a permanent staff member. In many ways the key aspect is the competency fit and this can be assessed quite swiftly.
4. Best practice benefits
Career contractors by their very nature move from business to business quite often and in many cases they are compelled to keep up to date with the latest industry training so as to justify premium rates. The advantage to the entrepreneur can be twofold; firstly these resources often deliver projects in a shorter timeframe due to superior knowledge and secondly there is the retained benefit of knowledge transfer to any retained permanent staff.
The changing nature of how we hire people has resulted in a workforce that is much more comfortable with having a ’portfolio’ career and eschewing the values of the ‘job for life’ that previous generations aspired to. While companies will want to retain intellectual property and know-how in its permanent headcount, there is mounting evidence that we require a flexible, scalable and contingent workforce to adapt to challenges and opportunities in today’s marketplace. This model could be exactly what the next start-up needs in order to thrive.