By: Lydia Dishman, Payscale.com
The temporary or contingent workforce has more than doubled since 1990; the Bureau of Labor Statistics estimates ranks have swelled to over 2.3 million.
And thanks to massive layoffs during the recession, more temporary workers than ever come to their assignments with higher level skills, including management experience and graduate degrees. For an employer, the advantages of highly skilled temp workers or overqualified candidates are clear but figuring out how to pay them may feel complicated.
Christopher Penn, director of Inbound Marketing at WhatCounts.com says his firm hired a skilled marketing coordinator for six months and paid that person well for several reasons.
“We used a contractor for specific marketing roles that we simply didn't have the manpower for and we needed someone who was ready to go the moment we signed the dotted line and swiped the credit card, with little to no training,” Penn explains.
How did they figure out how to pay that person? Penn and other small company leaders offer their tips on how to compensate a temporary worker who can hit the ground running and lead projects and initiatives.
Calculate the Right Salary Rate
Penn says he uses a simple formula that takes the equivalent salary of a full-time employee in that position. Annual wages for most positions in any industry can be researched on salary databases such as PayScale.
Penn then divides the median annual wage by 2,080 (the average number of working hours in one year) to get an hourly rate for compensation.
Andrew Schrage, co-owner of Money Crashers Personal Finance is not merely looking to outsource, he wants to bring full-time team members on board. So his main strategy revolves around an incentive-based compensation structure for freelance writers that allows for extensive bonuses and real rewards for good performance.
“In my industry, competition is high and creative content is king. In order to receive content that can stand up to the competition, a compensation system that fosters quality output is necessary,” says Schrage.
Build in Accountability
Dave Carvajal, CEO and founder of executive placement firm Dave Partners, agrees.
Carvajal believes it’s best to think about contractors as consultants doing project-based work. For example, he says, give a contracted chief technology officer well-defined goals for successful completion of the project including the timeframe and expected results.
“Create bonuses or incentives for completion of project on time or ahead of schedule with performance criteria in advance,” he says, “Consultants should earn more if they achieve results ahead of schedule.”
Offer Extra Perks
Beyond salary negotiations and performance-based incentives, Penn says WhatCounts.com offers contractors use of the company facilities such as the gym and on-site cafeteria. But Carvajal suggests going one step further.
“Make consultants feel like they are already employees,” by introducing them to existing staff, especially people they will work with to achieve their own success, he says. Contractors perform best when they feel like insiders.
He also recommends including them in relevant meetings where their learnings or contributions directly affect the results of project.
Ultimately, says Carvajal, employers should think seriously about hiring top talent.