The Top 5 Sectors for Contract Recruitment28 Sep, 20238 min
According to a study published on the LinkedIn Talent Blog, the number of listings for contract roles increased by 26% when comparing contract recruitment statistics from May to November 2022 to the figures from the same stretch a year earlier—with analysts wondering whether 2023 will play out as the “year of the contractor.”
Whilst we don’t have access to 2023’s statistics just yet, such a finding wouldn’t be surprising: one in five jobs in North America are now held by a contract worker, whilst a January survey conducted by publishing and market insights firm Wiley found that 41% of HR professionals leveraged contractors’ expertise to bridge skills gaps.
This guide explores and answers the question of “How does contract recruitment work?” before we delve into five of the top sectors for this form of recruitment in 2023. We’ll discuss why contract hiring operates so effectively for these industries, highlight some of the surprising business functions that contractors can fulfil, and note some of the benefits of contractor recruitment compared to building an in-house team.
How Does Contract Recruitment Work?
As we’ll see in our next section, contractor recruitment can benefit sectors across the entire market. A contract hiring provider enables you to flexibly adapt to changing market dynamics, fluctuations in seasonal demand, and shifting consumer habits with ease—but how does contract recruitment work, and how can a talent partner enable you to address your urgent and anticipated talent needs?
Understanding your business requirements. Whether they’re conducting a talent mapping exercise on your behalf or you already know precisely what kind of professional you need, your contract hiring provider will develop an understanding of the role you’re looking to hire a contractor for and the business function they’ll be fulfilling—including the scope and duration of the project, if it’s inside or outside of IR35 regulations, and the experience and skills required of the successful placement.
Shortlisting suitable candidates. Looking to their extensive network of active and passive candidates, the contract recruitment specialist will provide you with a shortlist of candidates matching your needs.
Interview and talent selection. A talent partner will be able to support you in evaluating application materials and conducting interviews with those professionals you choose to move forward with, taking as much or as little control of the process as you require.
Negotiation of contracts. Once you’ve selected the successful contractor, the agency will negotiate and draft up the necessary documentation with due diligence, ensuring that you’re in compliance with all regulations relating to pay, project duration, and the responsibilities of the role.
Contractor management and administration. Your talent partner will provide management, administration, and payroll support to candidates, enabling you to focus on the quality of project deliverables.
In short, contract recruitment provides business leaders, HR professionals, and hiring managers with access to a scalable talent solution that can help them to address skills gaps or augment their existing workforce.
At the same time, you can also save on the typical expense of hiring by engaging a contractor for your project, change, or business transformation requirements. Deloitte’s 2022 Global Outsourcing Survey found that contract hiring can save businesses between 20% and 40% on the cost of recruitment.
Almost all contractors—over 90%—are in the middle and later stages of their careers, meaning that they’ve got the time-served expertise required to hit the ground running. This means you don’t need to pull colleagues off their typically assigned duties to offer the extensive training and onboarding support a permanent hire might need.
Contractor Recruitment Statistics: The Top Five Sectors
So, now that we understand the process of contract recruitment in more detail, we can look closely at the sectors that are benefitting most from the talent solutions offered by a contract hiring provider, and the roles within those fields that are increasingly popular amongst businesses looking for contingent, project-based support.
Given the technical skills shortage—with 51% of recruiters reporting it as the biggest challenge facing talent acquisition in 2023—it’s perhaps unsurprising that the IT industry tops our list of the five sectors leveraging contract recruitment.
Average daily rates for embedded software engineers, applications support experts, DevOps professionals, and cloud architects are rising, with senior candidates required by many businesses as they look to enhance their product and service offerings or implement digital business transformation initiatives.
The increasing cost of IT professionals is also driving this transition towards cost-saving hiring methodologies. Organisations spend an average of 5% of their yearly revenue on IT recruitment and resources, with the finance and banking industries topping the list of expenditure, with over 7% of a financial organisation’s earnings before profit going towards IT-related costs.
2. Financial Services
Understandably, data analysis and reporting continue to top lists of the most attractive contract jobs in finance—although they continue to be challenged by the growth of compliance, machine learning, and legal roles across the financial and banking sectors.
These sectors are critical to global economies, meaning that connecting with the right talent for business-critical roles is vital. With the overall number of openings in the sector anticipated to rise up to 7% by 2031, it’s clear that the same technical skills gaps that are leading to the creation of IT contractor jobs are resulting in the same phenomenon occurring within the financial and banking industries.
At the same time, a number of international financial institutions continue to use legacy software and hardware due to the robust security, efficiency, and functionality that mainframe-focused languages such as COBOL possess.
This poses an issue when it comes to hiring, with early-career candidates—and even those now coming into senior roles—unlikely to have encountered the language or hardware it runs on, given its increasing age. Contract recruitment allows these organisations to bring specialists in to maintain and troubleshoot these ageing systems, whereas hiring them on a permanent basis would likely be ineffective from a budgetary standpoint.
3. Digital Marketing and Advertising
From running pay-per-click (PPC) campaigns to providing inbound marketing content and technical search engine optimisation (SEO) support, contract hiring is increasingly leveraged by organisations looking to save on their digital marketing and advertising costs.
The specialised knowledge that contractors possess makes them an ideal fit for the marketing environment, where each quarter may see a different focus, and workloads are often delegated and ‘sprints’ run on a project-by-project basis.
Given the deliverable-focused world of contractor recruitment, this allows companies to measure results effectively, with contingent workers able to provide tracking, marketing analytics, and reporting support to the companies that hire them, permitting business leaders to take data-driven decisions and adjust short-and-long-term strategies accordingly.
Contract hiring can be particularly useful for smaller organisations that don’t have the resources or budget to hire a permanent in-house marketing team, providing them with the expertise and knowledge to connect with and address their audience’s pain points—whether that’s through social media channels, email, or search engine results pages.
Historically, contract work within the fast-moving consumer goods sector has focused on temporary staffing for events management and promotion, often based on seasonal demand. Whilst this is still a factor, the industry increasingly relies on contract hiring providers to connect with expert product managers and analysts, particularly as big data and machine learning use grows.
These professionals possess advanced experience and are ready to hit the ground running, proving particularly valuable when it comes to project-based work around supply chain optimisation, market expansion, and localisation. Whilst engaging a localisation expert on a permanent basis may prove unnecessary when trying to expand into new regions or product areas, the project-based duration of a contingent contract means that employers can have the support they need for exactly the amount of time they require it.
Alongside these duties, contractor recruitment within the FMCG sector has also begun to focus on product development and research, quality control, and regulatory compliance roles—with these experts helping household names to continue to create enticing goods through the fresh perspectives they bring to the table, alongside mitigating the risk of expanding into new locales.
Jobs in renewable power are driving a rise in the number of contractors employed across the energy industry, with the US Energy and Employment Jobs Report (USEER) highlighting that all sectors aside from fossil fuels have sustained positive growth in 2022.
From solar and wind to hydroelectricity, expert energy contractors are employed around the globe to maintain the grid and ensure load is distributed evenly, conduct feasibility and environmental impact research, alongside constructing new power stations, battery storage solutions, and wind and solar photovoltaic installations.
Contract recruitment presents a range of benefits to energy firms, including flexibly responding to shifting business needs as a result of research or investment from the government and private sector. An experienced energy contractor will typically possess skills gained over a long career with several companies, enabling them to bring unique insights and perspectives to the problems they encounter in their roles.
Contingent workers provide a vital service to businesses across every sector, enabling organisations to reduce operating costs whilst implementing business change and digital transformation initiatives. Alongside this, their work on a project-by-project basis and advanced experience means that businesses can quickly adapt to market changes, enabling them to continue to meet their revenue expectations without taking time out of colleagues' schedules to train and onboard new staff.
If you’re interested in learning more about contractors and their role in the modern workplace, see our recent guide to The Top 5 Benefits of Contract Recruitment for an in-depth look at the positive impact of engaging with a talent partner on business operations.
The contract recruitment environment is witnessing significant growth, with contingent roles increasing by 26% in recent years. Whilst we eagerly await the statistics for 2023, the importance of these workers across the industries we’ve highlighted here is already evident.
This guide has answered the question of “How does contract recruitment work?” while exploring the benefits it offers to organisations across various industries. Contract recruitment empowers businesses to address their skills gaps efficiently while realising substantial savings in hiring costs, allowing them to tap into a pool of experienced professionals who are ready to begin work.
From IT contractor jobs to digital marketing and renewable energy, these professionals and the agencies that facilitate their services are enabling businesses to adapt to economic uncertainty and achieve their business goals, providing the flexibility and competencies needed to meet the evolving demands of consumers and the wider market.
Experts In Contract Hiring and Recruitment
At McGregor Boyall, our consultants are specialists in supporting businesses with a range of contract recruitment solutions, enabling you to connect with candidates who can enhance your business change and transformation initiatives and bridge your skills gaps.
Our work has seen us successfully assist FTSE 100 organisations with their urgent and anticipated contract hiring needs, and our service is designed to ensure you’re supported during every step of the recruitment process. No matter how complex your requirements are, contact us today to learn more about our contractor recruitment solutions.