Contract and Temporary Work in the Australian Market

Contract and Temporary Work in the Australian Market
Article contributed by Tallulah Brown
Written on 08 February 2016

Over the past 5 years, the Andersen Partnership has experienced an increase in the number of temporary workers being employed by organisations. As a business, we have tripled the number of temporary workers employed by us from the financial year end June 2014 to the financial year end 2015.  Currently, 16% of all jobs advertised on seek.com are for contract and temporary assignments.

In 2014, it was reported that Australia had the second highest percentage of temporary workers globally with 3.8% of our working population employed on a temporary basis. The rise of workers on a temporary or contract basis is happening globally. An increasingly mobile workforce has meant that organisations have had to become more flexible with staffing arrangements. Research indicates that temporary workers are now being incorporated into the strategy of organisations and are a key aspect of the overall hiring strategy.

Australia also has a high number of independent contractors working in the market. According to the Australian Bureau of Statistics, in a study on the characteristics of Employment in Australia, contractors made up 9% of all employed persons.  This was more prevalent in older workers with 54% being 45 years and over. We would expect to see this, as independent contractors tend to have a built up network after working in an industry for a number of years.

It has been argued that temporary work increases in times of economic instability as people are unable to secure full time permanent work.  However, research suggests the opposite. A large proportion of those working in temporary, freelance or casual arrangements are doing so out of choice as they enjoy the flexibility and variety that temporary work provides them with.

Benefits to Temporary Work

For the employee;

  • It offers flexibility, which works well in a world when this is one the key factors in job satisfaction. Contractors can select when and where they take assignments to give them a high level of flexibility.
  • The employee is able to try different roles and environments to see what works best for them. This gives employees greater exposure to industries and different, broader skillsets that they can bring to each role.
  • Hourly or day rates for contractors will be higher than permanent salaries as they do not include annual, sick leave or other bonuses.

For employers;

  • The flexibility offered in hiring temporary staff mean that they are able to respond to peaks in work, and scale cost accordingly. Within insurance, temporary staff work well to deal with seasonal volumes. For claims in particular, a storm may see a need to quickly recruit high volumes of temporary staff allowing for flexibility when the need disappears.
  • There are a number of reasons why a business may need a temporary worker, such as maternity leave or sickness, and this gives them the ability to have a worker for as little or as much time as is needed.
  • Hiring someone on a permanent basis can be a lengthy task, temporary workers can fill an urgent gap and have been pre-screened to save time.
  • It allows for a try before you buy system, to ensure the employee is going to be a good fit for the role or company.  

The Downsides to Temporary Work

For employees;

  • Contractors lose the security that permanent employment offers.
  • They have to be able to adapt to new environments and roles quickly and hit the ground running with assignments, often with limited training.

For employers;

  • There is a sense that temporary workers may not be as committed to their roles or work as hard as permanent staff. However, research does not indicate this and it has been shown that temporary staff work just as hard and are as reliable as their permanent counterparts.
  • Using a recruitment agency that understands their market well, and has pre-screened their temporary workers thoroughly, reduces the risk of hiring unreliable staff.

So where is the temporary and contract market headed for Australia?

Fewer people are working at one organisation for the entirety of their careers.  As more people look for flexibility and variety in their careers, temporary or contract work will become even more popular. But Australia does have some catching up to do and there is a market to employ more staff on a temporary basis for specialty roles.  As an example, there are much higher volumes of actuaries contracting at all levels in the UK.  Australia has a strong focus on local experience and is often missing out on talented workers who may require temporary work due to visa restrictions or uncertainty on how long they wish to remain in Australia.

From the inception of the Andersen Partnership in 2010 to present, our contract book has increased 40 fold.  While this has happened as we have grown globally as a business, it also reflects broader marketplace changes and an increasing acceptance of temporary and contract work as a career choice and as an attractive option for employers.

References: Australian Bureau of Statistics, 6333.0 - Characteristics of Employment, Australia, August 2014 and Greg Jericho, The Casulisation of Australia’s workfoce is Nothing to Panic About, http://www.theguardian.com/business/grogonomics/2014/oct/17/the-casualisation-of-australias-workforce-is-nothing-to-panic-about.

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