The traditional view of senior leadership positions is that the people occupying them are part of the permanent establishment of the organisation. However, while that might be generally true, it is not necessarily either the sole or optimal solution in all cases.
Short-term solutions
Contract personnel have always been used in top roles but this has usually been associated with expediency.
Classic examples include covering for the absence of the normal incumbent due to sickness, providing a stop-gap measure during recruiting or perhaps leading a project of fixed-duration, where the role will cease to exist at the conclusion. Yet many organisations, sometimes due to the above circumstances, get an insight into the much wider potential of using contract staff in senior roles.
The advantages
When speaking of a contract senior leader, certain attractions should come to mind:
- such individuals rarely have any interest in internal company politics or the manoeuvrings that are sometimes associated with that. They know that they have no long-term future in the organisation and this typically inclines them to greater focus on the mission and objectivity;
- as someone being marketed as a contract resource, the individual or their employer will usually have taken steps to keep their skills current through training and development. That removes this cost-responsibility from the client;
- contract personnel usually, by definition, have a very wide experience base of working in different organisations and various sectors. This can bring very different perspectives to the leadership table and clients can benefit from that;
- if the client wishes to terminate the role, for whatever business reason, there is no associated issue of redundancy and outplacement. Of course, the contract provisions would need to be examined carefully in advance to ensure that no penalty clauses existed etc.;
- the client has no ancillary costs to worry about such as pensions, cars, bonuses and so on;
- it can be a very effective way to engage in skills transfer and the up-skilling of permanent employees, as they benefit from the contractor’s experience. This is also important from a succession planning viewpoint.
Does this arrangement always work?
On the whole, this is a very successful approach that has yielded a high level of benefit and advantage to many companies. One of the biggest inhibitors to its wider exploitation is simply that it is unfamiliar to many, apart from in those few ’emergency’ type situations mentioned above. A mindset change is sometimes required to fully deploy this capability.
There are though, a few circumstances where using contract staff in an ongoing senior role might not be the best approach. An example may be where a company is starting to become too heavily reliant on contract personnel to the extent that it is becoming a corporate risk. That might sometimes concern auditors. However, these situations are rare for the most part. To say more about specifics, it would be necessary to look at the circumstances of an individual company.
Summary
More companies are starting to appreciate the potential advantages of using contract (or outsourced, which is a slightly different flavour of the same thing) resources. This is a growing marketplace and one that is likely to continue to grow over the years to come.
