Whether there is a recession here, or coming, or not at all, there’s certainly an element of belt tightening in preparation in the markets. One move is contractor conversion. This will reduce contractor ratio, theoretically reducing individual and overall cost.

For consultancy and supplier organisations going through this process, there is a lot to think about, especially if you are heavily entirely contractor delivery focussed.

Here are 12 considerations, prior to implementing a change to the contractor mix.

1.      Buy in. Getting buy-in from the management team to get everyone aligned.
2.      Target.  What’s your new operating balance targets and your criteria for individual hiring or conversion?
3.      Timeline. Plan to get there over a reasonable period as new habits take a while to form
4.      Financial Model. How does the new cost profile affect rates, and have you considered salary bands?
5.      Budgets. Once the modelling is complete you will need to work this into your budgets. Cashflow changes as salaries are paid typically in advance of receipt of income.
6.      Communicate. Communicate to your existing workforce, and talk to contractors one on one
7.      Employee Value Proposition. Decide on your EVP (not just your salaries), if you don’t have an existing one documented
8.      Hybrid culture. Bringing contractor and permanent team members together requires that both groups feel valued
9.      Value Chain. Map the value chain as the contractor and permanent flows are different
10.  Recruitment Framework. Ensure you are looking wider than technical skills to things such as cultural fit, values, and potential.
11.  Talent Framework. Create or scale your framework for managing an increased number of permanent employees
12.  Workforce Framework. Ensure you have scaled processes for selection of assignments and managing people between assignments.