Like many professional recruiters, we at Corps Team have seen a dramatic rise in hiring in recent months. Yet, as the economic impact of the pandemic lingers, we’re also observing a trend of employers hedging risk by hiring contractors rather than direct-hire placements.
The latest job numbers confirm what we’re seeing. “Professional and business services added 208,000 jobs in October, with temporary help services (+109,000) accounting for about half of the gain,” according to the US Bureau of Labor Statistics. These waves of temporary workers (who may work only a few weeks or months) and contract workers (who tend to stay between six months and two years) can have a lasting impact on the demographics of an organization.
A second trend we’re seeing, likely a result of this summer’s protests for racial justice, is an increase in employers focusing on diverse hires. Significantly though, while employers are prioritizing diverse candidates for their direct hires, the same is not true for contract hiring. This lack of demand for diversity in contract hiring is a missed opportunity with potentially enduring impact.
In analyzing our firm’s historic data, we found that typically 20-25 percent of our contract hires go on to direct hire roles with their employers. Similarly, academic research by Lawrence Katz of Harvard University and the late Alan Krueger of Princeton University found that contract workers comprise 6.9 – 9.6 percent of all US workers. That’s 10.5-15 million workers.
Because so many professionals follow this path from contractor to employee, and because contractors may actually stay as long as many permanent hires within an organization, failing to factor diversity into contract hiring is a lost opportunity for those seeking real change.
What can recruiters do to help employers embed diversity into their contract hiring? These five practices can help:
Allison O’Kelly is CEO and founder of Corps Team.