Cut Costs With Contract Work

Cut Costs With Contract Work

If “quiet quitting” was a top HR trend of 2022, get ready for the new one coming down the pike: “quiet hiring.”

What is this latest term to hit HR’s vocabulary? While the phrase can have a wide array of interpretations, it essentially describes organizations that are moving away from hiring traditional, full-time employees in light of the uncertain economy. Some may scale back hiring altogether, but others are turning to another pool of talent: contract workers.


A recent Forbes article predicted that the reliance on contract—or freelance, contingent or nontraditional—workers would become a “prominent hiring trend” in 2023. And the data backs up that claim: LinkedIn, for instance, recently found that the number of employers hiring for contract positions tripled since 2020.


Why the pivot to contractors? For most, it’s about the bottom line.


In this time of economic upheaval, many organizations are, unfortunately, having to turn to layoffs to sustain their business—but the work still needs to get done, which is where contractors can be an asset. Whereas full-timers net not only a salary, but often benefits and other perks, contract workers usually come at a lower cost for the employer. And this model allows employers to be more streamlined with how they invest in their talent. For instance, an organization can hire a team of contractors to complete a project or close an important deal and then, a few months down the line, pivot those talent dollars to another project that promises a big return on investment. Contract models give employers the flexibility they need to stay competitive in the uncertain world of work we’re in.


And the time couldn’t be more right. As employers pivot to more skills-based, team-oriented models in a post-pandemic world, contractors are often a perfect fit. The rise of hybrid and remote work is also making hiring contractors more seamless—and cost-effective, particularly for organizations looking to downsize from expensive real estate.


As the interest on the employer side in contractors and freelancers grows, organizations are finding job seekers are just as enthused about the concept. A recent report from Upwork, for instance, found that nearly 40% of the U.S. workforce—or 60 million people—performed some type of freelance work last year. And according to forecasts from Bank of America, the projected economic slowdown this year could increase that number by 10%. Likewise, reported that nearly half of workers it surveyed intended to take on a side job this year, driven by fears of rising inflation and a possible recession.


The conditions fueling the pivot to contract work aren’t necessarily ideal—for employers or employees. But, particularly in light of the events of the last few years, business leaders today have learned the value of being agile and willing to look to new models to thrive in uncertain conditions. Contract work may not be the long-term solution for all organizations, but for many, it’s the right fit to get them through what could be a very tumultuous year.