It used to be that after college graduation, most graduates headed off to begin their new careers for a company. Many joined large established corporations, while others began their professional lives at startups.
For many generations, landing a job offer that would pay the bills and provide career advancement was the Holy Grail for most young adults. Working for a company provided benefits, job security and a retirement package at the end of your career. The entrepreneurial few always headed out on their own to launch the next big thing, but that was always the exception, not the norm.
However today, Generation Y is changing the assumption that full-time permanent employment is the expected and best path. In the not so distant past, many professionals would choose to be a contractor when they were unable to find fulltime employment after layoffs. But instead many Generation Y’ers are now preferring to work as contractors for large companies, and choosing this route as their preferred career path. In a 2013 study by ODesk and Millennial Branding, a Gen Y consulting firm, found that 61 percent of respondents with “regular” jobs say they will, or probably will, quit their regular jobs within two years in favor of flexible options. Instead of being a stepping-stone in their job hunt, many Generation Y professionals now consider contracting or consulting as their career.
Why does Generation Y prefer contracting?
Yes, the recent recession mostly has played a large role in this shift with many professionals realizing that traditional employment doesn’t necessarily offer the job stability that they always assumed. The technology available that eliminates the need to be onsite to perform many jobs has made it much easier for people to make a full-time living as a consultant because more opportunities are available without geographic barriers. Part of the shift, however, may also be due to the tendency for this generation to put a premium on entrepreneurship and freedom. The Odesk and Millennial Branding survey said that freedom and the ability to work when and why they wanted was the most often cited reason for leaving full-time jobs.
What does this mean for businesses?
In many ways, the shift is positive for businesses because it allows flexibility for hiring for specific needs or projects, which saves on salary costs. Additionally, since most consultants and contractors are not given benefits, the companies can see further cost savings. With many top professionals choosing to be consultants, companies are increasingly finding themselves using a much larger percentage of contractors than previously. However, since most human resource systems are designed to primarily handle full-time employees, with a small percentage of contractors, this shift has created management issues for companies.
Managing flexible a workforce
As businesses adapt to managing a predominately Gen Y workforce, they will need to implement systems that will provide maximum productivity and efficiency. One solution that many businesses, both large and small, are turning to is vendor management systems (VMS). Vendor management systems streamline all phases of managing flexible workforces, including requesting positions, managing the hiring process, expedited timesheet workflow and tracking supplier performance data. By successfully managing a flexible workforce through a VMS, companies insure that they are getting the most for their staffing investment and retaining quality Gen Y contractors.
As the workforce adapts to this generations desire for flexibility, the companies that are able to efficiently hire and retain the best flexible workforce will be the ones leading in innovation.