One of the first questions recruiters have when they consider adding contract staffing to their business model is, “Which companies should I target?”
The first and easiest answer to this question is to target your existing client base. Gone are the days when contract staffing was limited mainly to the information technology sector (although that is still a hugely popular area for contract placements). Contractors are now utilized by nearly every industry for positions up to and including C-suite executives. Chances are at least some of your clients have utilized contractors or are considering using them.
That being said, there are some areas that are especially prone to using contractors. According to Top Echelon Contracting’s 2012 placement statistics, these were the top sectors for contract placements:
- Healthcare – 29%
- Business professionals and support staff – 25%
- Engineering and manufacturing – 16%
- Information technology – 11%
- Finance and accounting – 10%
- HR / legal / recruiting – 7%
- Sales / marketing – 2%
Let’s take a closer look at a few of these areas.
With the American population aging, contract placements in this sector keep increasing. The demand for contractors will likely get even more intense when the healthcare reform mandate requiring most Americans to have health insurance kicks in. This could easily push more consumers into an already overtaxed healthcare system.
Business Professionals and Support Staff
The use of contractors in the business professionals and support staff sector increased from 16% in 2011 to 25% in 2012. This is no surprise. Experts have been pointing to contract staffing in the professional sector as a major driver in the economic recovery. While the unemployment rate is still high overall, the rate for white collar professionals has been holding steady under 4%. The fact that many white collar positions are being filled by contractors shows that both employers and candidates in the sector are seeing contract staffing as a viable alternative to the traditional employment relationship.
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Engineering and Manufacturing
Companies in engineering and manufacturing are clamoring for highly skilled workers at all levels. There is a growing shortage because Baby Boomers are retiring and fewer younger workers are pursuing careers in this sector. Many companies are also bringing previously offshored work back to the U.S. in a trend called re-shoring, but they are finding it hard to staff these jobs at home. Contract staffing allows companies to bring in talent from all over the U.S. because workers are often more willing to relocate temporarily for a contract assignment. Workers may even consider a direct hire opportunity if they can try the new job and location on a contract-to-direct basis first.
Contract Labor’s Sweet Spot
Recruiters may also want to consider the size of companies they wish to focus on. The assumption may be that larger companies will be a better source for contract job orders, but many recruiters consider small-to-medium-sized businesses to be the “sweet spot” for contract staffing.
Why? Well, for starters, companies often have a greater need for contractors. They have limited funds and a smaller operating budget, but they still have projects to complete and deadlines that need to be met. Contract staffing is the easiest way for them to get the resources they need without adding to their overhead. Moreover, smaller companies tend to be more flexible when negotiating the contract and rates. Many larger companies have vendor management systems with primary vendors on site that drive down margins and minimize recruiter profit. And their contracts are often difficult to negotiate and leave little room for flexibility.
Whether you decide to target small-to-medium-sized companies, large companies, manufacturing, healthcare, IT, or something else entirely, the main thing is to promote your contract staffing services. Be sure to let every company you have contact with know that you can provide contractors. Advertise it on all your written materials, including business cards, email signature, and of course your website. If you put your contract staffing message out there, you may find that the right companies find you.