This article is meant to shed some light on an occasionally mystifying purpose for employing what is often referred to as temporary, contract, or ad-hoc labor.
What is Ad-Hoc Labor?
Before we get started, let’s define ad-hoc labor in the classic sense:
Labor performed or done for a particular purpose only.
And in the colloquial sense (my definition as a participant in the human resources industry):
An arrangement by which a company obtains temporary labor from a contractor who is, under the law, employed by a third-party agency.
The Benefits of Ad-Hoc Labor
This may seem counter-intuitive, but this type of arrangement can be beneficial to both the company and the contractor.
For the employer
A contracted employee can add value in many ways. The first, and most obvious, solution a contractor can add is by filling in for technical or demanding roles that have been suddenly vacated due to an illness, maternity, or unforeseen resignation. This is simply a matter of logistics as the ability to bring on new, permanent staff quickly can be hampered by notice periods, relocation challenges, or gardening leave/cooling off periods.
Derek O’Toole, Director of Finance for Silver Wheaton and former ad-hoc employee, notes that “undoubtedly the principal benefit of hiring a temporary staff member is the ability to gauge their capabilities and how they fit in with the organization – something that can be difficult to judge in a standard interview setting.” This adds to the notion that there can be serious potential downside risk avoidance in the often murky waters of making hiring decisions.
A contractor can also offer the employer the ability to bring on staff into a new role that they believe will either add revenue or create organizational value. Imagine a scenario where management believes market share is being lost to a competitor due to lack of capacity, or the converse where management is preoccupied with administrative duties, causing them to ignore key clients or revenue streams. This has the benefit of very quickly applying true market forces that will flesh out just how much value the added position really adds. A net benefit arises to the contractor as well, which we’ll get to in a few paragraphs.
As a secondary benefit to the employer, true labor costs are more readily identified, and the hidden costs of maintaining and administering staff needs, including real costs like work permit fees and health insurance, are more directly assigned to the agency or contractor.
For the Contractor
For the individual contractor, there are a couple of tremendous benefits that are to not be underestimated. Firstly, is the ability that the unique nature of the arrangement creates for the contractor to gain an unusual amount of access to a role or company that they may ordinarily struggle to get a foot in the door with. Not that the contractor wouldn’t be qualified to come on with the company, but more so that they’re likely to be given a “shot” without a CV that was divined from the heavens to HR’s dream specifications. From this comes the opportunity for the contractor to take the temporary period to turn an about-face on the company to look inward and determine if this is truly the place they want to be. And if so, they are now afforded the opportunity to crank up the after-burners and prove that they are an indispensable asset.
Mr. O’Toole from our employer conversation above undertook a number of contract roles himself, weighing the proper amount or professional opportunity and ideal cultural fit, before rapidly ascending into his current position. According to Derek: “The primary benefit of undertaking a temporary role is undoubtedly the flexibility it affords you. It gives you the opportunity to try out a role and a company that you may have never previously considered. I was initially taken on as cover for a maternity leave position, and things worked out well resulting in a permanent position becoming available once mat leave finished. Had I never worked there as a contract employee, I very much doubt that I would have been in a position to be successful in my application”. It’s difficult to argue with those merits.
This has become somewhat of a contentious issue in the workforce at large, and hence politics, in recent years. Some would argue that the future of employment is very much ad-hoc, leading to a hyper-efficient global economy in which “micro” services are fluidly and seamlessly traded. Others would say regulations should work to more closely tie employees to employers in order to provide for benefits, ensuring both employees and consumers are less susceptible to corporate abuse. I’ll leave that debate for another day with some pre-requisite reading:
Uber’s Employment Fight Just Got More Complicated: http://fortune.com/2016/03/04/uber-driver-unemployment/
In the Future, Employees Won’t Exist: https://techcrunch.com/2015/06/13/in-the-future-employees-wont-exist/
At any rate, making opportunities for oneself will boil down to the same tenets it always did, good old fashioned hard work and a can-do attitude.