Contract workers, also referred to as freelancers, independent contractors, contingent workers, or consultants are often hired by companies who are seeking to fill temporary positions or to test out new employees prior to bringing them on-board in a contracted capacity. Companies have several methods available to them in hiring contract workers/contingent workers or independent contractors.
1. Headhunters / Recruitment Agencies
The first option for companies to hire contract workers or contingent workers is to get in touch with headhunters or recruitment agencies. There are tens of thousands of headhunters and recruitment agencies in the United States, and companies can get started by simply conducing a Google search, contacting an organization that they select, and having a conversation about their specific job requirements. Recruitment agencies or headhunters partner with companies to source talent for them, and once they place someone within a company as an independent contractor or freelancer, these organizations earn a commission on what companies pay these workers in the first year. Some of the largest headhunters in the US are Robert Half, Kelly Services, Korn Ferry, and Manpower. These headhunters have built relationships with their clients over the past few decades, and most of their business comes from these legacy relationships, through which they supply contingent workers or contract workers.
The way that the headhunting process works is quite straightforward. Companies first conduct a conversation with a sourcing manager from a headhunting firm or recruitment agency about their job requirements in detail, discussing the key skills and experiences that are sought from contingent workers as well as the compensation that the company is willing to pay their selected contractor. Once the requirements have been finalized, agreements are signed between the company that is seeking to hire independent contractors or contract workers / contingent workers, and the recruitment agency that they select. Recruitment agencies or headhunters then advertise the position on a variety of job boards including Monster, Dice, Indeed, ZipRecruiter, Craigslist, among others. Headhunters and recruitment agencies also typically maintain large lists of contract workers/contingent workers in their databases, whom they begin contacting in order to determine if any relevant individual may potentially be interested in the position. In many cases, these recruitment agencies sub-contract the contingent workers’ sourcing process to agencies further down in the value chain. All of this is usually done by recruiters working for the recruitment agency and this process is generally quite manual and time intensive.
Once the recruitment agency finds the right contingent workers for the end client, they often conduct an initial screening prior to presenting a set of contingent workers’ resumes to the end client. Thereafter, the end client interviews the contingent workers and hires the contract workers/contingent workers that they prefer. Headhunters or recruitment agencies then charge the hiring company a commission on the first year’s pay of the independent contractor which generally varies between 15-25%.
2. Job Portals
Another method that can be used to hire freelancers or independent contractors is to post jobs directly to job portals such as Monster, Dice, Indeed, and ZipRecruiter. This is a more cumbersome process as companies then receive hundreds or even thousands of resumes of candidates/contingent workers who choose to apply for the position, which forces companies to then manually filter through the resumes that they receive in order to select the best contingent workers, interview, and eventually hire them. On average, this process takes 30 to 40 days! Due to the fact that this option requires a large investment of time, effort, and money, it is unsurprising that many companies opt to pursue other options.
3. Freelancing Websites
The third way to hire independent contractors or contingent workers or contract workers for companies seeking to fill positions rapidly is to use freelancing websites such as Upwork, Fiverr, Freelancer.com, and SkillSoniq. On these platforms, a company can quickly and easily sign up and post their job requirements. Thereafter, companies get connected with independent contractors/contingent workers and can choose to hire them either at a fixed price or on an hourly basis. This method is generally the cheapest and quickest, which is why an increasing number of companies opt for this option. However, there is a caveat in that many freelance websites such as Upwork.com, companies get connected with independent contractors who work remotely, usually from outside the United States. This fact leads to difficulties with coordinating conversations, thereby causing critical and often disruptive delays which is a particularly severe issue in the case of difficult or highly specific tasks. For this reason, a new type of freelancing platforms is emerging which focuses on connecting companies with freelancers that are local to the area where a company operates, thereby avoiding differences in time zones as well as potential language barriers, maximizing accountability and effectiveness. You can learn more about this emerging type of freelancing platforms here.
4. Consulting Firms
The final way for a company to hire freelancers or contract workers/contingent workers is through conducting business with consulting firms or managed service providers. There are thousands of such firms, including McKinsey, Accenture, Deloitte Consulting, Boston Consulting Group, amongst many others. These firms act as vendors which execute assigned projects by providing companies with contingent workers/consultants that work on an hourly or a fixed cost basis. In this model, the delivery of the project is owned by the vendor with which a company conducts business, and the vendor directly employs the contingent workers. While the benefit of this approach is that the consulting firm takes ownership of the project, this method is highly expensive for the client company seeing as consulting firms charge premiums that are significantly above what they pay their employees and/or the independent contractors/contingent workers with which they work.