Market-based pay and bill rates are essential to attracting quality contingent workers
The attraction and retention of quality contingent workers has emerged as one of the biggest challenges for businesses and their staffing partners. In the solution hunt, conventional wisdom suggests that paying top dollar will attract “A” players, while companies that offer below-market pay rates tussle over the leftovers.
In reality, the market for contract labor is fluid and pay rates sometimes fluctuate from week to week. Having a systematic approach that proactively aligns pay and bill rates with shifting market conditions can keep clients from underpaying or overpaying for contract talent and create a competitive advantage for recruiters and hiring managers. In our experience, this important strategy is often overlooked by busy staffing firms, business managers and HR leaders.
Here are some ways that clients and staffing suppliers can work together to get pay and bill rates right.
Tips for Getting Pay and Bill Rates Right
Monitor Pay Rates
Offering pay that reflects the value of a job in the external market is critical for attracting quality contractors and temps especially in competitive staffing categories and labor markets. Our view was confirmed by a recent Jobvite study, which cites pay as a compelling factor in an employee’s decision to join or leave an organization.
Comparing your pay rates to market intelligence available through PeopleTicker, other Internet resources and your staffing partners is one way to spot rates that may lag or exceed market conditions and competitors. Conducting frequent and timely reviews of pay and bill rates by job title, geography and staffing performance can highlight wage inconsistencies that stymie recruiting in some locations and ensure that you are obtaining talent at market pricing.
Consult Your Suppliers
Staffing suppliers can help you get out in front and stay there by providing a window into market changes in real time. Because recruiters speak with hundreds of contractors daily, they have their fingers on the pulse of the market. An experienced recruiter can sense rising demand and tighter market conditions when contract professionals start receiving multiple offers or turn down interviews based on wages.
Recruiter insight and feedback can assist clients in moving from a reactive to proactive management style focused on solutions. At eTeam, our recruiters and account managers guarantee that submitted candidates match rate cards and they provide rate intelligence on a real time basis when they identify a position that doesn’t align with the market. For example, collaborating with line managers and modifying job descriptions or technical requirements can be a viable alternative to raising rates for IT contractors when budgets are tight. To win the battle for talent and fill requisitions quickly, staffing clients and their partners have to anticipate market activity before it occurs.
Align Pay with Business Strategy
Meeting line managers’ expectations and providing culturally compatible candidates is a whole lot easier when the pay and bill rates for contingent workers synch with a client’s compensation philosophy, business objectives and competitive positioning. For instance, if hiring “A” players is your number one goal, why not offer above-market compensation to contractors and temps?
Extending your philosophy and value proposition for full-time employees to contingents and freelancers ensures the acquisition of consistent talent across the enterprise and encourages advantageous conversions of high performing workers from temporary to full-time status.
Consider External Factors
Labor market conditions aren’t the only thing that impact pay and bill rates for contingent workers. Legislative changes mandating sick leave, healthcare coverage or overtime effect total compensation and benefit costs for W-2 contingent workers. At the same time, crowdsourcing and alternative sourcing are disrupting the market by injecting more independent contractors and SOW freelancers into the mix.
To compete for top talent, staffing suppliers need enough breathing room between pay and bill rates to incorporate external changes, elevate pay rates in impacted categories, or enhance their benefit packages. Failing to act quickly or initiate proactive rate adjustments may put clients at a disadvantage when compared with those who stay abreast of the ever-changing landscape. For instance, clients that fail to adapt their pay and vetting practices may be unable to leverage a growing market segment of non W-2 resources.
By working together to get pay and bill rates right, staffing firms can help their clients attract, retain and engage the best contingent workers in the market.