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Contracting in Good Times and Not-So-Good Times

Ahhhh... contracting! What could be better? Set your own rates, set your own hours, be your own boss... right? Just like running any business, there will be good times but there will also be times that are -- let's say -- more challenging. Typically as a contractor you are offered more flexibility regarding hours. And, typically, clients will pay a premium for your services. Unfortunately, as many in Alberta are currently experiencing, "typically" does not equate to "always".

There are a number of reasons why companies use contractors as part of their staffing strategy: accessing difficult-to-find skill sets, providing the ability to scale up quickly to support their growth, and bringing in people with key/unique experience are all fine examples. However, a much overlooked reason includes the ability to reduce costs quickly when the business requires it. Maintaining a portion of a company's staff as contractors means that companies are able to release headcount and associated costs without incurring severance costs and broader market ill-will.

We've seen this many times in Calgary in the past weeks, where the news mentions that XYZ Co is releasing 500 people "but they are primarily contractors", almost implying that these "contractors" are somehow less integral to a company's business success. Anyone in the industry, including clients, knows that contractors hold key positions and have knowledge capital vital to a company, they contribute to the economy by paying taxes, and they have mortgages to pay and families to feed, just as "employees" do.

As much as no client wants to leave a contractor without work, the reality is, their ability to easily cut costs is one of the fundamental reasons that contracting opportunities exist. It is why companies will justify paying a premium to contractors. The premium is there to offset risk because it can end very quickly -- as quickly as oil prices can fall by 50%. This is the "risk of loss" that the CRA uses as one of its tests to validate a business-to-business relationship. It's an unfortunate down-side to contracting.

When one finds themselves on the wrong side of a market down turn, there can be many challenges in store that make it difficult to find a soft landing. In addition to keeping in contact with your agency partners, I recommend networking every chance you get, upgrading education and/or certifications and taking some time to re-visit your business plans/strategy to see what adjustments might need to be made. These ideas, and many others, have been shared in blog posts written here, in Eagle's Talent Development Centre. There is a lot of great advice to job seekers and to contractors who are about to enter the interview process and may be a bit rusty. The following are some links to past postings that may be of particular interest:

...and there are many, many other posts/articles that you can explore. Have you had an experience (positive/negative) in the industry lately that you are willing to share? Do you have any advice for other job hunters?

In the words of the immortal Red Green, "We're all in this together!"