Why a great contractor value proposition is important
The definition of contractor refers to a temporary or non-permanent employment relationship. Contractor workers typically include individuals such as freelancers, temporary employees and those employed through staffing agencies. If you’re still unsure on the contingent meaning, another way to describe this workforce is contract workers.
Many organisations in New Zealand have historically viewed their relationship with the contractor workforce as a simple transaction: skills in exchange for remuneration. These organisations did not see the relationship as a strategic partnership where skilled workers help solve complex challenges.
But trying times and the pace of change has meant that organisations in New Zealand are becoming more ambitious and creative in their integration of contractor workers.
The popularity of contractor workers continues to grow. New Zealand organisations failing to account for their non-permanent population will lose out in the battle for skills and expertise.
A strong contractor value proposition (CVP) is critical
Contractor workers in New Zealand are firmly in control of their careers. Current talent shortages in New Zealand mean these workers have even greater choice when it comes to their next move. What’s more, an individual interested in your company costs 10 per cent less than one who needs to be 'sold' the opportunity.
Strategic organisations are beginning to recognise this dynamic and are changing their approach. By creating a contractor value proposition, the best talent in New Zealand seeks out the organisation. Organisations then benefit from engaging with the skills they need, at a cost that is right for their business.
But a contractor value proposition must run deeper than simply engaging the workers’ interests. The CVP must incorporate all elements of the worker lifecycle, including onboarding, retention and re-engagement.
How to define an engaging contractor value proposition
Organisations may be searching for a ‘catch-all’ CVP, but personalisation is essential. In other aspects of life, individuals receive tailored communications that directly address their needs. This expectation has extended to the world of work.
While this diversity in engagement creates complexity, it simultaneously offers the building blocks for your CVP. Find the common threads that unite these workers in spite of their differences, which may include:
- Flexibility: Compressed work weeks and greater input in shift patterns may attract contractors seeking a work-life balance.
- Reward and recognition: A competitive salary aligned to the wider New Zealand market remains vital, but attracting contractors now involves more than just compensation. Conversations around on-demand pay as a competitive differentiator are gaining traction. A growing number of organisations in New Zealand seek to offer greater financial stability to their non-permanent workforce.
- Development opportunities: Legislation has previously made learning and development a difficult topic of discussion with contractors. But with talent in short supply, New Zealand organisations may need to consider how they keep their network of contractors in contact. Sending regular communications that showcase development opportunities or interesting project work illustrates a commitment to your contractors’ progression.
With key pillars in place, organisations can then tailor their CVP to accommodate different segments. An IT contractor resonates with a different contractor proposition than someone working in a call-centre environment.
You must ensure that contractors have a degree of choice. Consider strengthening emotional buy-in to your organisation's purpose and ambitions. You can achieve this by making it easier for contractors to connect with your goals. Allow contractors to choose the parts of your Contractor Value Proposition that are most relevant to them.
Share ownership of your CVP
The contractor value proposition has significantly lagged behind its full-time equivalent, the employee value proposition (EVP).
Historically, the EVP has been owned by the HR function or another centralised group (such as People and Culture). This ownership creates accountability. Teams focus on attracting, engaging and onboarding the best permanent staff. HR’s efforts to understand the workforce often includes regular surveys, updated benefits packages and exit interviews.
In contrast, the organisations that scatter responsibility for the contractor community, such as individual business units and hiring managers are in charge of finding and attracting the skills they need.
A lack of cohesion creates blind spots, impacting an organisation’s understanding of the volume and value of contingent workers within the organisation.
But we can no longer lean into a lack of visibility. The world of work demands agility, and organisations must change faster than ever before to keep pace.
Be consistent and fulfil promises for your contractor value proposition
Your CVP should set the tone of how you want to engage with contractors. From the outset, you need to clearly define what it is that you'll offer as an organisation.
You must implement a broader change management strategy. Doing so ensures that every interaction throughout the workforce lifecycle upholds this contractor proposition. This starts from contractor engagement and onboarding to departure and transition to a part of your alumni network.
Similar to other strategic shifts, this transition needs to be led by senior stakeholders who encourage teams to:
- Adapt their language: When teams see contractors for the skills they provide rather than the terms of their engagement, we transition to a more holistic workforce strategy. Rather than distinguishing ‘perm’ and ‘non-perm’, we must focus on the skills and expertise that individuals offer.
- Reflect on their actions: Contractors are integral in project delivery. When celebrating success, it’s important to highlight their contributions in reaching these milestones.
- Continue an ongoing conversation: Maintain this commitment to celebrating involvement during the offboarding process. The tone on which you finish the conversation is the one that contractors will take to future conversations. When you ask for their opinion on your organisation, ensure their response reflects the promise you made at the outset.
Remain mindful of legislation
The surge in demand for contractor workers continues. The ability to work with anyone, from anywhere, is a huge attraction for contingent workers. This ability also appeals to organisations looking to widen the scope of their search.
But when engaging across borders, organisations will need to remain mindful of permanent establishment rules. Tax, co-employment and permanent establishment rules differ by country. It's essential to have local experts to guide your understanding and help to mitigate risk.
Take care of your contingent workforce
We can no longer ignore the value added by contractors.
Organisations should have a strong contractor value proposition. These organisations also need the right software, marketing strategy and current insights. By doing so, employers can stand out and use their CVP effectively in crowded talent networks.
Partnering with a leading workforce solutions provider helps organisations attract more candidates. This also opens up opportunities for better candidate engagement. To explore how we could elevate your Contingent Value Proposition together, talk to our team today.