Twice as productive


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Earlier this year, we surveyed 700 contractors, permanent employees and employers across a broad range of sectors and industries in the UK & Ireland, to get a 360° perspective on the differing thoughts and behaviours of the two kinds of workers.


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Twice as productive

  1. 1. TWICE ASPRODUCTIVE ON AN AVERAGE DAY*? We asked employers, permanent, and contractstaff the same questions – with fascinating results! *Twice as many employers believe a contractor is more productive on an average day than a permanent member of staff.
  4. 4. INTRODUCTION PERmANENT OR CONTRACT STAff? A 360° PERSPECTIVE. Almost one and half million people, We went on to ask employers about their that’s 4.6%* of the Uk workforce, are criteria for hiring contractors. They could freelancers and contractors. What select from a choice of options but many motivates them? Are they significantly elected to go further and give us feedback different from their permanent in their own words. It’s all here. counterparts? how productive do the Next we asked workers, both contract and workers in each group believe they are? permanent, to give us their ‘insider take’ how loyal, and how engaged are they with on the workplace. Are contractors flighty the organisations they work for? Given and disengaged, always on the look out for that a contractor’s involvement is typically their next project? Are permanent staff too time-limited, and a permanent employee’s caught up in the seething hotbed of office is open-ended, there are bound to be politics to get any work done? We’ve got differences. but just how marked are they? the answers. We decided to find out. THE ‘PSYCHOLOGICAL CONTRACT’ There’s been some research in this field, AFFECTS ALL WORKERS but virtually nothing that’s included the What this survey reveals with startling employer perspective. We wanted a 360° clarity goes to the heart of what’s called standpoint. So we posed essentially the The Psychological Contract. That’s the same questions to all three interested unspoken contract that includes all the parties: contractors, permanent staff and assumptions and unvoiced expectations employers. The results proved fascinating. that exist between employer and employee. Informal, undocumented, and REVEALING DISCONNECT intangible by definition, these findings Probably most revealing was the demonstrate that it continues to set the disconnect between how permanent and agenda between employer and workers, contract workers see themselves and of quality contractor staff to business whether permanent or contract. how employers see them. Topics such performance, in context it also confirms as contractor loyalty make compelling The research is timely since some the significance of the recruitment partner reading: Contractors regard themselves employers may be concerned about role in navigating the new legislation as very loyal to the organisations they the impact of the 2010 Agency Worker successfully on their clients’ behalf. work for, however short the period. Yet Regulations (AWR) on their contractor employers continue to regard permanent responsibilities. The survey not only * Source: freelancer and Contractor Services staff as significantly more loyal. demonstrates conclusively the value-add Association (fCSA) march 2011.TWICE AS PRODUCTIVE ON AN AVERAGE DAY?
  5. 5. DEfINITIONSCertain words and phrasesrecur throughout this the interests of clarity we’veset out our interpretation of theterms below.What do we mean by…ContraCtor LoyaLtyAlso known as interims, day raters A strong feeling of support oror freelancers, the contract workers allegiance.referred to in this report are primarilymiddle to senior level professionals.All work for a management companyor recruitment agency rather thannegotiating terms directly withemployers.EngagEmEnt ProduCtivity PsyChoLogiCaL ContraCtThe level of involvement, The quality and speed of an The expectations held by bothenthusiasm and attachment an individual’s work. employer and employee that existemployee or worker has towards over and above the written contractan organisation and its goals, all of employment between them.of which ultimately affects their Understanding the informal andperformance. often unvoiced assumptions on both sides can optimise individual and organisational performance. 5
  6. 6. EXECUTIVE SUmmARY Of fINDINGSThis research shines a revealing light We’ve represented it more as an executiveon the gap between what employers snapshot than an executive summary, sothink of their staff, both permanent and that you can see at a glance some of ourcontract workers, and what those workers most interesting findings. We’ve includedthink of themselves. Equally important it page numbers so it’s easy to find out more.demonstrates what each group valuesmost in the workplace.WhAT EmPlOYERS ThINk… AbOuT ENGAGEmENT AbOuT LOYALTY AbOuT PRODuCTIVITY Contractors are more likely to Permanent staff are far more Twice as many employers THE HEADLINE be engaged in their role than loyal than contract workers. believe a contractor is more permanent employees. productive on an average day than a permanent employee. 37.2% of employers believe 77.5% of employers said that 14.1% of employers think permanent staff are more likely permanent staff were most permanent staff are the most THE STATISTICS to be disengaged in their current loyal to their organisation, productive, 28.3% favour role. 33.2% think non-permanent with only 2.1% favouring contract staff, while 52.6% hold staff would be more disengaged non-permanent staff. that both groups are equally and 19.1% say both would be productive. equally disengaged.WhAT CONTRACTORS AND PERmANENT STAff ThINk… AbOuT ENGAGEmENT AbOuT LOYALTY AbOuT PRODuCTIVITY In job content, financial reward and 77.6% of contractors and 90.8% of contractors and social atmosphere (the workplace 86.6% of permanent staff 86.3% of permanent staff THE STATISTICS factors both groups said were agree or strongly agree that agree or strongly agree that most important to them) there they are loyal employees. they deliver a high level of was no significant statistical output (volume and quality). difference between contractors and permanent staff. Page 8 Page10 Page12
  7. 7. COUNTER-INTUITIVE?It’s out with the stereotypes and in with a refreshing new take on what makes a mixed workforce tick. WHO SCORES HIGHEST? PERmANENT STAFF CONTRACTORS GO TO PAGE… A higher income would motivate 13 me to work harder If offered, I’d accept a role with 11 better job content for less money I get involved in social situations/ 16 events at work I would leave my permanent job or contract before completion for 17 a significant pay rise I would leave my permanent job or contract before completion 17 because of lack of work to be donemORE AlIkE ThAN UNAlIkEmost telling of all perhaps is the number of striking similarities between permanent employees and their contractor counterparts. IN THE WORKPLACE, HOW PERmANENT STAFF CONTRACTORS ImPORTANT TO YOu IS… Important or highly Important or highly GO TO PAGE… important important job content? 99% 98.1% 8 financial reward? 94.6% 93.2% 8 Social atmosphere? 75% 73.1% 8 7
  8. 8. ENGAGEmENT IT’S A PRETTY ClOSE CAll, bUT EmPlOYERS ThINk PERmANENT STAff ARE lESS lIkElY TO bE ENGAGED WITh ThEIR WORk. It’s revealing that most employers believe We asked employers which type of permanent staff are more likely to be employee expects the most from them, disengaged in their current role (37.2 covering factors ranging from job content per cent) than non-permanent staff to work/life balance. Then we asked our (33.2 per cent), with 19.1 per cent of two groups of workers to rate the same employers believing both would be equally factors. disengaged. EmPlOYERS, WhERE ThEY mADE just what is engagement and why is it so A DIffERENTIATION, fElT ThAT desirable? We’ve summed up engagement PERmANENT WORkERS hAD fAR as ‘the level of involvement, enthusiasm hIGhER EXPECTATIONS Of ThEm. and attachment an employee or worker Yet the figures demonstrate that in all has towards an organisation and its the elements that combine to create the goals, all of which ultimately affects their psychological contract, contract workers’ performance’. In short engaged employees expectations and involvement have a great care passionately about their work. It deal more in common with their permanent WHO IS mORE LIKELY TO bE follows that developing and maintaining counterparts than employers currently DISENGAGED WITH THEIR a workforce dynamic that promotes believe. CuRRENT ROLE? employee engagement is key to an The key to engagement appears to be organisation’s success. involvement. Which perhaps makes sense 10.5% So what makes for an engaged worker, of one of the most interesting findings in whether contract or permanent? this area: the importance workers from 33.2% 19.1% both groups place on social atmosphere in A SuCCESSFuL PSYCHOLOGICAL the workplace. CONTRACT Take a look at the bar charts on the Since it’s pretty impossible to work right. You’ll see that we set employers, effectively in a strained atmosphere, 37.2% contractors and permanent staff seven you could speculate that a relaxed and different questions approached from sociable environment is the product of a successful psychological contract. Is a Contractors slightly different angles. Perm staff happy workplace the last, and possibly both equally most important, piece of the jigsaw? I don’t knowTWICE AS PRODUCTIVE ON AN AVERAGE DAY?
  9. 9. Of those employers that favoured one between contractors at 98.1 per cent and 360° group over the other, many more believed permanent staff at 99 per cent. that job content would be of significant ObSERVATION: importance to permanent staff. SOCIAL ANImALS SAmE Now for the true picture. Our research Intriguingly, and no doubt of great interest qUESTIONS, revealed that how they spent their to employers, is the finding that over half the respondents in both groups DIffERENT working hours was hugely important rated social atmosphere very highly. The fINDINGS. to both groups. Of those rating job content as important or highly important workplace vibe is only topped by financial rewards and job content for the majority of there is less than a percentage point workers.EmPlOYER WHICH TYPE OF EmPLOYEE EXPECTS THE mOST FROm THEIR Contractors Perm staff both equally I don’t knowPERCEPTIONS EmPLOYER?100%90%80%70%60%50%40%30%20%10% 0% Career Job content Training Social Financial rewards Work-life balance Job security development atmosphereSTAff HOW ImPORTANT IS IT THAT YOuR WORKPLACE PROVIDES YOu Contractors Perm staff 1 - Not important 2 - IndifferentCONVICTIONS WITH…? 3 - Important 4 - Highly Important70% 60% 50% 40% 30% 20% 10% 0% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Career Job content Training Social atmosphere Financial rewards Work-life balance Job security development 9
  10. 10. lOYAlTY What makes someone loyal to an Our research reveals that while over IN EmPlOYERS’ organisation? Is it length of service, plus three quarters of contract staff think of EYES the value of their benefits package? Or is themselves as loyal, employers seriously PERmANENT it something far less tangible? how much do professionalism and a desire to belong underestimate their allegiance to the organisation. STAff ARE fIRm come into play? fAVOURITES IN ThE lOYAlTY STAkES. EmPlOYER PERCEPTION When asked about loyalty, 77.5 per cent of WHO IS mORE LOYAL TO YOuR OVER THREE QuARTERS OF employer respondents said that permanent ORGANISATION? CONTRACTORS THINK THEY ARE LOYAL staff were most loyal to their organisation, 3.4% 2.1% with 2.1 per cent favouring non-permanent In a fascinating correlation, 77.6 per cent staff and a not unsizeable 20.4 per of contractors either agree or strongly 17% cent believing there is no difference or agree that they are loyal employees. (This remaining unsure. against the 77.5 per cent of employer respondents who say permanent staff however the view from the coalface is are most loyal.) Unsurprisingly perhaps, more complex and likely to give employees 86.6 per cent of permanent staff either food for thought. 77.5% agree or strongly agree that they are loyal employees. Contractors Perm staff both equally I don’t knowTWICE AS PRODUCTIVE ON AN AVERAGE DAY?
  11. 11. ThE fUll STORY Contractors Perm staff 1 - Strongly disagree 2 - Disagree 3 - Neither agree nor disagree 4 - AgreeWORKWISE – WHAT mAKES YOu TICK? 5 - Strongly agree 60% 50% 40% 30% 20% 10% 0% 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 I would change from being my role regularly presents me I feel secure about the future of I would get faster career progression permanent to non-permanent for with new challenges my career by changing companies the right role, or vice versa 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 I have a strong I have a strong I proactively find I am a loyal I have paid for If another I would emotional emotional ways to improve employee my own training/ organisation recommend that connection to my connection to the my work skills professional offered me a role friends/family work colleagues company I currently development at with better job for my current work for least once in the content for less organisation last three years money, I would change companiesIF YOuR DREAm JOb CAmE ALONG Delving a little deeper, both groups of feelings either way. When asked theWhen asked if they would go permanent workers scored highly on their dedication same question in relation to their currentfor the right role, 70.9 per cent of contract to pro-actively improve their work skills. employer, permanent employees were onlyworkers said they would. Perhaps as Well over half of the contract workers 5.6 per cent more likely to feel a strongcontractors, they are uniquely placed to questioned had paid for their own training connection to their current employer.identify the best permanent opportunities. and/or professional development at least once in the last three years. Permanent bETTER JOb CONTENT buT LESSOnly a minority (41.6 per cent) of long- mONEY?term staff would leave the familiar shores workers weren’t far behind. Are contractors more interested inof permanent employment to contract, Interestingly, when permanent and financial factors than permanent staff? Iteven for a very tempting assignment. contractor staff were asked whether they seems not. Our figures show that they areIn post-recessionary times it appears had a strong emotional connection to 10 per cent more likely to accept a rolethat permanent and contract staff alike their colleagues, their responses were with better job content but less moneyappreciate the value of a fulfilling and remarkably similar. The majority - an than their permanent role. almost identical number - had no marked 11
  12. 12. PRODUCTIVITY TWICE AS mANY EmPlOYERS bElIEVE A CONTRACTOR IS mORE PRODUCTIVE ON AN AVERAGE DAY ThAN A PERmANENT mEmbER Of STAff. 14.1 per cent of employers think their permanent staff are the most productive, whereas more than double that number, 28.3 per cent, believe non-permanent staff are more productive. A fascinating finding. however the majority of employers, 52.6 per cent, hold that both groups are equally productive. WHO IS mORE PRODuCTIVE ON WHO IS mORE LIKELY TO HIT THE AN AVERAGE DAY? GROuND RuNNING? CONTRACTORS ‘NEED LESS CuDDLING’ 5% 5.2% As one employer eloquently put it, ‘Contractors need 28.3% less cuddling’! The view that contractors are work-ready from 32.5% 48.7% day one is widely shared amongst 52.6% employers. A massive 48.7 per 14.1% cent told us that contractors were most likely to hit the ground 13.6% running. Only 13.6 per cent favoured permanent staff in this Contractors both equally respect. Perm staff I don’t knowTWICE AS PRODUCTIVE ON AN AVERAGE DAY?
  13. 13. ThE fUll STORY So we’ve seen that twice as many employers believe that contract heels at 86.3 per cent. Non-statistically speaking, the results are pretty close. workers are more productive. but are Surely money is a greater motivator these perceptions borne out by direct for contractors than their permanent questioning of the groups themselves? Not equivalents? Not so, it seems. 51.2 per exactly. Permanent staff rate themselves cent of contract workers agree or strongly more highly it seems, than their bosses. agree that a higher income would motivate While 90.8 per cent of contractors agree them to work harder. but at 56.8 per cent, or strongly agree that they deliver a high permanent employees outstrip them in level of output in terms of both volume and prioritising financial reward. quality, permanent staff are hot on theirHOW PRODuCTIVE ARE YOu? 60% 50% 40% 30% 20% 10% 0% 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 I deliver high level output (in volume and quality) A higher income would give me motivation to I prefer to work independently than in work harder group situations Contractors 1 - Strongly disagree Perm staff 2 - DisagreeCould it be that boredom has a direct link 3 - Neither agree nor disagreeto productivity? None that’s immediately 4 - Agreeobvious. At 22.3 per cent and 21.9 per 5 - Strongly agreecent respectively, there was virtually nodifference between the contractors andthe permanent staff who confessed tobeing bored. The same applies to the HOW bORED ARE YOu?far lower, but almost equal numbers 60%who declared themselves thoroughly 50%unproductive – a reassuringly low 3.4 per 40%cent for contractors and 3.2 per cent forpermanent staff. 30% 20%So it would appear that permanent and 10%contract workers are a lot more alike in 0%terms of productivity and motivation than 1 2 3 4 5employers believe. I am easily bored in my current role 13
  14. 14. EmPlOYERS: SPEAkING fROm EXPERIENCE... WHERE CONTRACTORS STAND OuT 80% 70% 60% 50% 40% 30% 20% 10% 0% Flexibility Only the hours actually worked are paid for They have no impact on headcount The potential speed of hire/market responsiveness Coverage of skills gap - temps provide access to expertise only for the limited time that it’s needed No requirement to provide benefits, e.g. sick pay, pension (until October 2011 for PAYE and umbrella) Other HIGH QuALITY SPECIALIST HORSEPOWER TRANSFERAbLE SKILLS AT CRITICAL TImES Employers, it’s clear, think highly of One of the big advantages of contract workers, regarding them hiring non-permanent staff, said as an essential element of the 42.9 per cent of employers, hR mix. less than a per centage was the potential speed of hire point below the obvious ‘flexibility’, and market responsiveness. 70.2 per cent of employers value Contractors, they told us, bring contractors for the immediately quality additional specialist applicable transferable skills horsepower at critical times and they bring to the workplace. In can be relied upon to speed up written feedback, expressions like momentum on specific projects. ‘results-orientated’, ‘experienced professionals’ and ‘able to hit the ground running’ were recurrent themes.TWICE AS PRODUCTIVE ON AN AVERAGE DAY?
  15. 15. WhY DO I USE“TO ESTAblISh CONTRACTWhEThER WORkERS?ThERE’S ANEED fOR ThEROlE lONG We asked employers to tell us in theirTERm.” own words what they regarded as the key benefit of using contractors. here’s a snapshot of the most revealing responses. “They have a wide range of experience and proactively keep their skills up to date.” “Task focused, not drawn into office “Need less cuddling! So I have more politics.” time.” “A wider portfolio of skills and “I get better skills for my money.” experience than the average employee, with exposure to operating at a level higher than they “I like the entrepreneurial mindset are contracted to.” that contractors bring to my business.” 15
  16. 16. INSIDER INSIGhTS ThE lOW DOWN ON OffICE POlITICS Employers have even stronger opinions And the true story? Will we ever know? when it comes to office politics. just one Despite guaranteed anonymity only 12.6 per cent of them felt that contractors were per cent of permanent staff admit to more likely to be water cooler conspirators. politicking and not one respondent would Permanent staff top the ratings with ‘strongly agree’ to finding themselves a massive 78.7 per cent of employers drawn into office politics. Contractor branding them as major political players. numbers are even sparser, with just 9.7 per just 17 per cent believe contractors and cent registering a guilty plea. permanent staff are equally to blame. PERmANENT STAFF CONTRACTORS EmPLOYERS 0% 0.5% 3.3% 1% 9.2% 12.6% 14.7% 19.3% 17% 21.7% 33.8% 38.9% 78.7% 49.3% Strongly disagree Contractors Disagree Perm staff Neither agree nor disagree both equally Agree I don’t know Strongly agreeTWICE AS PRODUCTIVE ON AN AVERAGE DAY?
  17. 17. EmPLOYERS WhO’S mORE CONTRACTORS SOCIAblE? Contractors Perm staff both equally I don’t know PlACE fAR mORE 1.5% ImPORTANCE ON 5.7% SOCIAl EVENTS AT WORk ThAN EmPlOYERS 41.9% bElIEVE. Strongly disagree 50.9% Disagree Neither agree nor disagreeA categorical 50 per cent of employers Agree Strongly agreebelieve permanent staff are more likelyto be involved in, or present at social PERmANENT STAFF CONTRACTORSevents. 41.9 per cent think permanent and 2.2% 2.4%contract workers are equally involved andjust 5.7 per cent view contractors as the 8.6% 9.6% 14% 11.4%heart and soul of the wrong they are! In reality contractorsjust see off permanent staff on the 16.1% 18.2%sociability stakes – but only just. Animpressive 68 per cent of contractors 59.1% 58.4%enjoy socialising with colleagues, setagainst a remarkably similar 67.7 per centof permanent workers.ShOUlD I STAY OR ShOUlD I GO? Contractors Perm staffWHAT WOuLD INFLuENCE YOu TO LEAVE A PROJECT OR ROLE? WHAT WOuLD CHANGE YOuR mIND? 60% 50% 40% 30% 20% 10% 0% Company ethics not in line with my values Job content is no longer enjoyable Role is too stressful Lack of career progression opportunities New job offer If I felt I could not succeed in the role Difficult internal processes/ office politics Financial remuneration is insufficient Lack of actual work to be done (idle) Role failed to meet expectations Grievance with direct manager/team Other Significant rise in pay Retention bonus more flexible working arrangements better benefits Change of management/ leadership Promotion or change of role internally Other 17
  18. 18. CONClUSION ThE hUDSON RECOmmENDATION Perhaps the most revealing aspects of our survey are those that highlight what contractors and permanent staff have in common. both share a commitment to professionalism and a desire to make Not all positions are permanent and not all The answer is to use a recruitment partner a difference and find meaning in the professionals want to commit themselves that’s not only up to speed with the new workplace, whether their stay is time- indefinitely, hence the contractor market. regulation, but also offers compliance limited or open ended. management as an integral part of its Our employer feedback confirms that far from being ruthless, money driven proposition. there will always be a place for contractors loners, we’ve learned that more contractors alongside permanent staff. more than that, having incorporated AWR into our than permanent staff contract workers are valued and respected operational framework it’s our view that by a wide variety of employers for their I would leave a position if there wasn’t employers looking to fill skills and/or ‘can do’ attitude and the speed and quality enough work for them to do experience gaps can take heart from of their contribution from day one. this research. The message is that with I would accept a more interesting job for the right recruitment partner you can Of course, very different skill sets and less money proceed with confidence, since taking on a levels of seniority sit under the contractor I want to get involved in the social side contractor is an excellent way to label, from advertising account executives of work. through IT project managers to acting I fill skills gaps on time-limited projects CEOs. These are valuable insights for employers I gauge whether a role warrants a harbouring reservations about contractor for those who choose it, the variety, unique permanent employee engagement. challenges and flexibility of contract work I tap into experience and working outweigh the inherent lack of security AGENCY WORKER REGuLATIONS practices gleaned from other sectors that comes from going it alone. Those AND THE SKILLS GAP and/or competitor businesses who choose to use them can take heart, Across all sectors and sizes of business, contractors emerge from our research as the contractor requirement is on the I inject new blood into your team without not only consummate professionals, but increase. At the same time Agency Worker incurring long term fixed costs. also all-round assets to the workplace. Regulations (AWR) have increased One in every 20 Uk employees is now a employer obligations in relation to certain contractor and the market continues to contractor groups. So how can you draw grow. To find out more about hudson’s on flexible talent when you need it, while quality contractor offering, please contact meeting your statutory requirements? your dedicated hudson contact.TWICE AS PRODUCTIVE ON AN AVERAGE DAY?
  19. 19. AbOUT ThIS RESEARCh “TWICE AS PRODUCTIVE ON AN AVERAGE We surveyed over 700 respondents: DAY?” employee contacts, both contract and permanent, and employer clients. Respondents were based in England, Scotland and Ireland and completed the survey during june and july 2011.EmPLOYER SECTORS Advertising/marketing/media Professional Services 2.2% Construction/Property/Engineering Public Sector 3.4% 6.2% Education Resources 14.6% 1.9% banking/Financial Services/Insurance Retail 4.3%1.6% FmCG Telecommunications0.6% 2.8% 25.1% Healthcare (Public Sector) Tourism & Hospitality 4%0.9% Information Technology Transport 5.6% 4.7% manufacturing utilities 7.1% 1.9% 4.7% 5.3% 1.2% 1.9% Non-profit Wholesale/Distribution Pharmaceutical Other 19