The national unemployment rate was at a low in the beginning of the 2020 calendar year. However, three months into the year was March, where the entire global market juxtaposed the earlier, fiscal trajectory. For the next few months, most corporations and smaller businesses saw it hard to remain operating due to the cost of overhead and the lack of revenue coming in, as their clients stop purchasing. Luckily, the manufacturing industry was deemed essential to sustain everyday life, which to many of TriMech’s clients, was a saving grace. Despite being essential, our clients did not scrape by unscathed, and many were needing flexibility by limiting a company’s overhead. That’s where Staffing came in since many wanted to learn more about the use of contractors in their workspace.
Difference Between Contractor vs. Direct Hire
Now that the manufacturing industry enjoyed its jump start on the resurgence of the country, recent client outlooks have been more positive. Our clients want to grow but are unsure of what the future holds for their business in the current landscape. When a company brings on an employee directly, on day one of employment for that candidate is as an XYZ corporation employee.
As a contractor, that candidate is TriMech’s employee. With a direct-hire comes benefits for the employee which then in return becomes overhead for the employer, including health insurance, dental, salary, 401K contribution and paid time off. Savvy business owners understand these costs are front-loaded. To expand on that, if this new hire sticks around for the long term, contributes greatly to the growth of the company, then the investment or cost in that person was more than justified. The problem with hiring this way, in a fragile economic market, become even more antiquated by the fact that a company must remain as lean as possible to “weather the storm.”
To help combat this issue, our clients are now turning to contractors to assist with production, workload, etc. TriMech places positions from a 40-60 hour a week SOLIDWORKS Designer, who works in and amongst the existing design team, to a Mechanical Engineer who redesigns a medical device concept, from a location remote to our client to limit contagion. These contractors serve as an expansion of your current workforce, interacting in the role of your typical employee, without expanding overhead. If the economy collapses tomorrow and all business ceases, so do you your cost for the contracted employee. This is not the case with direct employees.
As the market regains strength these same people who have been ramping up to their colleague’s speed then become free for our clients to hire after a defined time of six months of employment. Understanding these options can make a big difference in your ability to come out strong from difficult times.
Interested in finding out more about working with TriMech? Check out our infographic, Finding Your Perfect Candidate with TriMech Staffing, to get a look at the whole process.