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Deepening Your Contract Worker Pool in a Tough Labor Market

Nov. 22, 2019
Want to stand out from the fray? Develop creative recruiting strategies and foster a culture that values and rewards these employees.

Attracting and retaining qualified workers continues to be a challenge throughout the manufacturing industry. A recent survey by the National Association of Manufacturers found 71% of respondents list it as their top concern. In response, many companies are increasingly looking to build out their workforce with contract workers. While this strategy makes sense in a competitive employment market, it also presents recruiting challenges. To be successful, manufacturers need to develop creative solutions that help address the needs of this class of worker.  

1. Go Beyond Salary

Competitive pay rates are always appealing to contract workers, but so are benefits that haven’t historically been available to them. Paid time off, holidays and sick leave are all powerful incentives that can help companies struggling to attract candidates.

One example of this practice comes from Pioneer Automotive Technologies, Inc. (“Pioneer”), a developer of automotive infotainment devices. When competing manufacturers near its Springboro, Ohio, facility raised wages, Pioneer not only increased all long-term, hourly pay rates by up to 10%, but for the first time offered both existing and newly-hired contract workers at the plant up to six days of earned time off each year. The company also partnered with a staffing firm that offered an additional earned five paid holidays to its contract employees. The results of the combined incentives have been encouraging. With its contract workers in the Springboro facility, Pioneer has achieved a 98.03% fill rate and observed a noticeable decrease in turnover.

2. Offer Bonus Opportunities

Referral and performance bonuses are also attractive to contract workers, especially if the hourly pay rates are lower than neighboring businesses. Often these are funded by a staffing agency but they’re more impactful if the manufacturer plays a role.

With referrals, it’s important that everyone understands the parameters. Contract workers should know that they do not qualify for the bonus if they bring in a candidate who turns around and quits the next day. Instead, for example, a $50 bonus can be given to the contract employee who referred the candidate when their referral works a minimum of 40 days. This program is even more successful when the on-site supervisor knows this is the goal and commits to doing all they can to retain the new hire.

Recognition programs are especially effective for contract workers. When a manufacturer recognizes an individual that has gone above and beyond his/her required duties with a financial bonus, it helps build loyalty and create a sense of pride from the worker. To take it one step further, the manufacturer should offer additional recognition such as hosting a department ceremony, highlighting the contractor in a company newsletter, or promoting the news through social media.

3. Target New Audiences

Contract work is typically attractive to the unemployed and underemployed, especially in manufacturing where it’s seen as temporary. It can be hard to attract candidates who are looking for a permanent job or who are already fully employed. But when companies offer direct-hire solutions, they can widen the talent pool to include these potential candidates.

For existing employees, the opportunity to shift from being a contract worker to a direct hire can also be motivating, not only encouraging them to be a model employee, but providing them with career opportunities that give them a reason to stay with the company instead of jumping to another contract job.

4. Re-invest in Contract Workers

Instead of pocketing rebates and price reductions from their staffing partners, companies can find ways to re-invest their savings in their workforce. One large machine manufacturer recently renegotiated its rate, receiving a 2% reduction with each contract worker that reached six months on the job. Instead of sitting on the savings, the company is investing the money back into the contract workers through various programs, including raises, paid lunches and giveaways.

5. Provide a Variety of Training Options

Financial savings can also be used to offer training and education programs that attract contract workers who are interested in pursuing a more defined career path. In a recent survey of hourly workers in the transportation and logistics industries, 95% of respondents indicated they'd invest regular personal time to learn a new skill. Training that focuses on building worker proficiency on the plant floor, such as operating a forklift, can be done in-house or in collaboration with local organizations. A good example is a program in Ohio called LIFT the TriState, which brings together local businesses, a non-profit organization, a community college and a staffing firm to offer unemployed and underemployed adults hands-on training from experienced warehouse personnel.

Companies can also offer training that goes beyond developing technical aptitude. Increasingly, businesses are seeing the importance of developing soft skills in their workers in order to increase retention. These include how to communicate effectively, work as a team and think critically. Companies are also offering classes that help contract workers improve their quality of life outside of work, such as teaching financial skills including how to fill out tax forms, manage money, obtain a mortgage, apply for a loan, etc.

6. Create a Culture of Value

Contract workers are a growing part of the manufacturing labor pool and an asset to many companies. With the cost of hiring continuing to rise, it’s imperative to not only bring in new talent, but keep them engaged, motivated and happy at work. Developing creative recruiting strategies and fostering a culture that values and rewards contract workers can be extremely effective in helping manufacturers achieve these goals.

Amy Langston is a Regional Director for BelFlex Staffing Network, a staffing and flexible workforce solutions firm in the commercial sector. She has worked in the staffing industry for more than 12 years and currently covers the Little Rock, Arkansas area.

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