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18 August 2023


Like the rest of the World, New Zealand is facing an unpredictable economic time over the next 12-24 months. Emerging from a global pandemic into election year and officially in recession, many NZ businesses are juggling whether to push ahead with planned ICT initiatives or instead adopt a ‘wait and see’ approach.


While there may be a trend towards headcount freezes and sinking lid policies for FTE hires, there will be some projects that cannot afford to wait, and natural attrition will require a certain level of backfill hiring just to keep the lights on.


A recent ANZ Recruitment Report for the first half of 2023 shows a distinct trend with a steady rise in contract and temp roles (up 1.7% in Q2) and a consistent drop in permanent placements (down 4.7% in Q2).


In recessionary environments FTE headcount budgets are often cut and companies are more considered when hiring permanent staff. But work still needs to be delivered, and often that work is urgent. Hiring a contract resource as needed makes good sense.


Engaging contractors in a volatile market just makes sense.

Why engaging ICT contractors in a recession is a good idea


Save money and reduce fixed costs

It is a fallacy that contractors are more expensive than full time employees (FTEs). You can, in fact, save money by hiring contract resources rather than carrying permanent headcount.


Permanent staff tie up capital and incur many expenses not required for contractors. On top of salary, it is mandatory at a minimum to cover holiday and sick leave, training and development, KiwiSaver contributions and statutory holidays for FTEs. For contractors – you pay only for hours worked.


Engaging contractors is a cost-effective option when compared against the fixed costs of hiring FTEs, because it offers a flexible way to progress business initiatives.

Pay only for the resources you need – when you need them.



Access the best talent

We have all experienced how difficult the ICT talent market has been since Covid, and while there has been some softening, it is still very hard to attract and secure top talent when you need to.


Contractors back themselves as being the best at what they do – they are pre-qualified and referenced, professional and skilled specialists, with a reputation for coming up to speed quickly and adding value.


Increase your talent pool to include access to the best ICT talent in the market by engaging contractors.



Scale up and down quickly



Switch contract resources on or off as required, providing the ability to pivot at speed to changes in your business or the market.


  • With an underperforming employee, it can be challenging and time consuming to work through the process of letting that person go.
  • If a contractor is not meeting expectations, it is much easier to part ways from a legal, cultural and team morale perspective – simply define the notice period required in the contract for services. No hard feelings. No HR involvement. No additional costs.

Engage the right skills at the right time

Adapt quickly to changing demands

Flexible resourcing allows businesses to engage ‘fit for purpose’ contractors and subject matter experts – the exact skills you need, exactly when needed.

If business needs change, simply let the contract resource go and replace them with a resource better suited to the new requirements,



Immediate productivity

  • Contractors are used to ‘cold starts’ so can come up to speed quickly to add value.
  • Contractors require a much less involved onboarding process.
  • Contractors are already skilled in the services you need, alleviating the need for training.
  • Hiring top contractors offers the additional benefits of access to specialised expertise and knowledge transfer to permanent employees.

No headcount approvals required

Most organisations have much less stringent policies around hiring contractors versus hiring FTEs.



Less management input

Contractors are industry professionals who take a great deal of pride in delivering a high quality of work. They are invested in doing a great job, as a positive referral will help them obtain their next engagement. Contractors, once provided with the outcomes expected, tend to be self-directed and require minimal training or daily guidance.



Contractors offer diverse work experiences and innovative ideas

Contractors offer a unique quality that few permanent employees can: a large volume of diverse work experiences. This means that contractors can give insights into current best practices, trends and technologies being utilised by other businesses. They may be able to suggest innovations that are entirely new to your industry – providing serious competitive advantage.



‘Try before you buy’

A company may wish to engage in a contract-to-hire model, engaging a contract resource with the view to converting them to a permanent employee as headcount becomes approved or available.


This offers the employer many benefits, which include:

  • Gauging whether the resource has the necessary skills, is suitable for the role and a cultural fit before making a long-term commitment.
  • Observing the resource performing in the role – much more effective than a traditional interview process.
  • Accessing and onboarding talent quickly without the need to involve HR and then converting to permanent at their convenience.

Factors to consider when engaging contractors

Recruiting contractors

  • Partner with a reputable contracting services provider. They are well connected and will be able to tap into talent that you would not be able to access otherwise. They will take the time to understand your business and team, saving you time and effort by providing pre-qualified shortlists of suitable resources to consider.
  • Hiring Managers should do the hiring. The best outcomes for the business will be if the direct manager hires the contractor themselves, every time. They know the skills they need, the person required and the exact role and deliverables needing to be filled. 90% of the time HR will not be equipped to qualify skilled resources for specific pieces of work.
  • Interview carefully, using tools like Zoom or Teams if a face-to-face meeting is not possible. Unlike when hiring for a permanent FTE, multiple interviews involving many different people are not needed when hiring contractors. The key is to utilise the right person in your business to assess whether the contractor has the pre-requisite skills to do the job you need them for – and then move quickly to secure them. The best contractors are in demand and often have several options open to them at any given time.
  • Do check the contractor’s references – in particular check what previous clients have said about the contractor’s work and how that might be relevant to your assignment. Don’t be afraid to ask to speak to referees directly to validate specifics. If possible, informal or ‘off the record’ references are a great option also – seek referrals from people you know and trust.


Onboarding contractors

  • Set and agree clear expectations of what is required – outcomes and deliverables, hours, place of work, team meetings needed to attend, reporting, etc. This will minimise confusion and allow the contractor to settle in and become a productive member of your team quickly.


Contractor engagement

  • While contractors may have different needs than FTEs, this does not mean that the way you engage with them requires a different approach. To get the best value from contract resources, listen to what they have to say, get to know them personally and professionally and provide them with what they need to do their job effectively, whether it is tools or access to stakeholders or decision makers.

Talk to us

Lexel’s Resourcing as a Service (RaaS) team offers customised, flexible resourcing solutions to meet our clients’ ever-changing needs​.


We are specialists in the ICT and Digital sector and have a very large and diverse talent pool of contract resources who have been pre-screened and referenced, available for engagement.


We would love to speak with you about your specific requirements and how we can help your business to benefit through engaging flexible resources.


Please contact us to set up a time to chat. Alternatively, you can email Amanda van Ryn, General Manager Resourcing as a Service, who will be happy to assist.

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