January is typically the time when workers are reassessing where they want the new year to take them. We know from our research that contractors typically start looking for their next opportunity 6 – 8 weeks from their contract end, so chances are the contractors on your books are highly likely to be already searching for their next role.
In the fast-evolving modern workforce, retaining top talent has become a critical challenge for businesses. The competitive job market demands an innovative approach to ensure that skilled professionals stay engaged and committed, and one effective key strategy is the use of contractor extensions.
Here we discuss why contractor extensions matter and suggest the strategic steps you can take to retain your top talent in 2024.
The outlook for 2024
As we step into 2024, the employment landscape remains fiercely competitive. Skilled professionals are in high demand, and the gig economy is reshaping the way businesses approach talent acquisition and retention. Recognising the scarcity of top talent, companies are increasingly turning to contractor extensions as a valuable retention tool.
Read more here on how the scarcity and high demand of top talent is influencing recruitment https://www.oncoreservices.com/news-resources/the-rise-of-the-empowered-contractor-2023-and-how-recruiters-are-responding
Why Contractor Extensions Matter
Contractor extensions go beyond the traditional employer-employee relationship, offering a flexible and dynamic way to keep key contributors within the organisation. This strategy fosters loyalty, maintains institutional knowledge, and allows businesses to adapt quickly to changing needs.
So, what strategic steps can make contractor extensions an integral part of your talent retention strategy?
Building Strong Relationships
One of the pillars of successful contractor retention is building strong relationships. Effective communication, recognition, and integration into the company culture are key components. Regular check-ins, team-building activities, and acknowledgment of achievements contribute to a positive work environment, making contractors feel like valued members of the team.
In Oncore’s State of Contracting Survey last year a staggering 78% of contractors highlighted a company’s culture as very important to them, with open communication and collaboration coming out top as the most important aspects to them (at 80%). Read more on the importance of culture to contractors here: https://www.oncoreservices.com/news-resources/unleashing-the-power-of-your-companys-culture
Offering Professional Development
Investing in the professional development of contractors is definately a forward-thinking approach. Providing opportunities for learning and growth not only enhances their skills but also demonstrates a commitment to their long-term success. Training programs, workshops, and skill enhancement initiatives contribute to a culture of continuous improvement, making contractors more invested in both personal and organisational growth.
Partnering with a third-party CMO can help streamline access to diverse training opportunities, lifting the burden off internal resources. This external support ensures contractors benefit from industry-relevant programs, enhancing their skills in a more collaborative setting.
Moreover, exploring professional development through recruiter suppliers is another valuable consideration. Leveraging a recruiters' extensive network can facilitate workshops and training sessions on behalf of the hiring company. Again this more collaborative approach avoids the perception of "being the employer," reinforcing the contractor's status whilst benefiting from access to external resources.
Competitive Compensation and Benefits
In the competitive job market of 2024, offering competitive pay rates and benefits is crucial. In our Survey pay rate remained the single most important aspect of a new contract at 85% of respondants rating it as very important. Companies need to stay abreast of industry standards and market trends to ensure their contractor packages remain attractive. Creative approaches to compensation, such as performance-based bonuses and unique perks, can set your organisation apart and reinforce the value you place on your contractors.
Flexible Work Arrangements
The desire for flexible work arrangements has become a significant factor in talent retention. Contractors appreciate the autonomy that comes with remote work, flexible schedules, and other accommodations that contribute to a positive work-life balance. Embracing and adapting to these trends not only satisfies the current workforce but also positions your company as a forward-thinking employer.
Transparent and clear communication is the cornerstone of any successful working relationship. Setting expectations, providing constructive feedback, and addressing concerns promptly create a sense of trust and reliability. Establishing open lines of communication ensures that contractors feel heard and valued, fostering a positive working environment. To read more about how to optimise successful working relationships with contractors follow this link: https://www.oncoreservices.com/news-resources/9-best-practises-to-optimise-successful-contractor-relationships
In the digital age, leveraging technology is crucial for efficient contractor management. Implementing project management tools, collaboration platforms, and other technological solutions streamlines processes and enhances communication. A tech-savvy approach not only improves efficiency but also demonstrates a commitment to providing a modern and effective work environment.
Managing contract extensions – what is the process?
Usually, a contractor’s fee comes under a project budget or departmental budget rather than being part of the company headcount. Renewing their contract will usually require a few levels of approvals and it can take a few days or weeks to confirm an extension has been agreed to by all parties.
Does it require a brand new contract to be signed?
For any contract extension, there must be an agreement by letter or contract which is signed by the contractor and the end client. If this is managed through a recruiter, then the recruiter is likely to require a copy to be signed between them and the end client also, unless they have a master agreement in place.
If there is a change in the scope of work or contractor rates then a new or amended contract should be drafted and your usual process followed.
Time is of the essence!
Having a speedy contract extension process is key to successfully retaining skills in your business for as long as possible. Recruiters are reminded to check in early with clients about how they are progressing with key projects and the performance of their contractors. It is a good opportunity to highlight the need for them to review and renew contracts now in January, so as not to lose out on their best talent moving elsewhere.
Oncore supports our clients and recruitment partners by facilitating much of this process and can ensure updated information is uploaded to all relevant systems. Please contact us if you need support or more information at 1300 654 484.
Forging ahead despite economic uncertainty
Businesses may be facing tougher economic uncertainty but they will need to continue to forge ahead with key projects to drive top-line growth. In these cases, they will need the skilled talent to carry those important tasks through to completion.
As we navigate the challenges of talent retention in 2024, contractor extensions emerge as a powerful tool in the toolkit of forward-thinking businesses. Building strong relationships, investing in professional development, offering competitive compensation, embracing flexible work arrangements, fostering clear communication, and leveraging technology are essential steps to ensure the success of your contractor retention strategy. By adopting these strategic measures, your organisation can not only retain top talent but also thrive with this competitive modern workforce.
If you need help managing your contractors through Oncore, please reach out to us on 1300 654 484 via our support line or complete an enquiry here.