As the economy goes, so goes the business at PEAK Technical Staffing USA, and, right now, business at PEAK is looking pretty good.

The company, based in O’Hara Township, is opening three new offices to meet the growing demand it is seeing from customers for specialized contract engineers.

New offices are opening in New York City, Silicon Valley and Calgary, Canada, bringing the number of outposts to 11.

The company expects 2012 to be a strong year, with roughly 40% growth….

Read the full article.

By: Leslie Stevens-Huffman

“Time kills deals” should be the mantra of managers and human resource leaders who need to keep agile competitors from cornering the market for highly qualified contract engineering professionals.

Recent news reports confirm that pending retirements and a lack of new graduates will create a 51 percent shortage of power engineers in the U.S. over the next five years. In fact, only 14 percent of U.S. undergraduates are currently studying science, technology, education and math (STEM).  After the first year of college, 40 percent of students in those fields switch majors, according to a White House study.

Even the U. S. military could be hurt by a lack of workers with STEM degrees, based upon a newly-released report by the National Academy of Sciences. Worse yet, the problem isn’t limited to the United States. Engineering managers face increased global competition for top performers as Australia, Czechoslovakia and the United Kingdom have recently announced pending shortages of full-time and contract talent.

Laggard firms may have to endure vacancies in high-impact positions or win bidding wars for experienced contractors unless managers act quickly and decisively during the selection process. But the long-term implications could be worse as recruiters vigorously present top contenders to company managers who act with urgency and strategically re-up assignments to keep prized contractors off the market.

You snooze, you lose.  Eventually, engineering firms that refuse to streamline protracted selection processes and leave prospective contractors in the lurch could face depleted talent pipelines or damaged employment brands.  Research shows that candidates subconsciously judge whether they want to work for an organization based on how they’re treated during the selection process.

So how can you avoid the global talent crunch by hastening the contractor selection process?

1.  Source Proactively

Anticipate and communicate projected contract needs in advance so technical recruiters can create a pool of suitable prospects and review opportunities with coveted veterans who are finishing other assignments.

2. Prioritize High Impact Positions

If the predictions hold true, recruiters may be inundated with contract requisitions. Help them focus their time and efforts appropriately by prioritizing contract positions that have the biggest impact on project outcomes, client satisfaction and the bottom line.

3. Set Clear Expectations

Although the benefits of an accurate, detailed job description may seem obvious, engineering managers can’t afford false starts in a tight recruiting market. Meticulously review the project scope and performance expectations so recruiters make perfect matches right off the bat.

4. Interview Selectively

You have nothing to lose by interviewing the strongest candidate and extending an offer if your staffing partner offers a performance guarantee. Otherwise, your top choice may be taken by the time you complete several interviews.

5. Streamline the Selection Process

Facilitate quick decisions by eliminating unnecessary steps in the selection process and consolidating others. For example, save time by requesting contactors who’ve already passed a drug screen and background investigation and scheduling back-to-back interviews with various members of the team.

6. Follow the 24 Hour Rule

Provide immediate feedback on resumes and interviews, because managers who fail to act may have to settle for second best, when top contractors have their choice of assignments.

Therefore, it’s important to interview contractors before an assignment to get a good sense of whether there’s a true fit from as many perspectives as possible.

To get an overall sense of what’s important to contractors, PEAK Technical Staffing USA conducted an anonymous survey of 348 engineering contractors randomly self-selected from a pool of approximately 6,000.

When asked to rank the advantages of being a contractor, not surprisingly great compensation topped the list. Most career contractors are more interested in higher pay associated with flexible labor, than long-term security.

A close second was interesting, challenging assignments. Most career contract engineers truly care about the type of work they do, and interesting work provides a high incentive to remain a contractor.

Not far behind these two was the ability to work in a city desirable to the contract engineer.  For some, if your job is in Bangor or Bismarck, and they want to be in Boca Raton or Baton Rouge, you may have a real problem on your hands, especially when winter rolls around.

Overall, contract engineers ranked working on leading edge technology and working with flexible time, as less important.  The results of the survey are shown in the  chart below.

The most important thing to note is that, while there are significant correlations among engineer preferences, different contract engineers care about different things. So while working in a desirable location was important (ranked 5 or 4) to 128 contractors, for 81 it was less important (ranked 1 or 2) as compared with the other criteria.

Other considerations of importance to contract engineers includes access to medical and dental insurance at competitive rates, the ability to have their pay direct deposited into their bank accounts and the ability to participate in a 401(k).

By: Leslie Stevens-Huffman

Imagine heading into combat without support from allies or a strategic battle plan. Unthinkable, you say? Well the unthinkable happens every day when managers try to win the war for top-notch engineering contractors by relying on vague connections with a host of unproven staffing firms. Fortunately, it’s easy to create dynamic staffing partnerships that ensure your opportunity to work with the A-team on every single project.

Less is More

When it comes to talent acquisition, volume doesn’t guarantee quality. In fact, the most qualified contractor could be snatched away by a wily competitor while you scour through scores of resumes and conduct numerous interviews. Working with one or two qualified staffing firms engenders familiarity, which creates efficiencies and reduces the need to interview several candidates to fill a single contract position.

Select Partners Strategically

It may seem like all staffing firms are the same, but understanding their subtle differences is the key to selecting the right partner. Choose a firm that fulfills a thoughtful list of tangible criteria such as recruiting experience and technical capabilities, talent sources and inventory, insurance coverage and knowledge of your engineering disciplines and projects. Don’t overlook intangible qualities like chemistry and communication, so recruiters feel compelled to call you first when an exceptional contractor becomes available.

Establish Ground Rules and Expectations

Time is of the essence in a competitive talent market. So, create a one-page service level agreement that spells out each party’s role and responsibilities including the timeframe for responding to requisitions or requests for interviews or feedback. And don’t forget to ask about exclusive access to top engineering contractors. Then, hold each other accountable for fulfilling these commitments, since mutual accountability is the cornerstone of productive partnerships.

No Surprises

Establish a consistent evaluation, selection and onboarding process and clearly communicate your performance goals and expectations. This helps recruiters adequately screen and prep candidates before interviews and assignments. Make sure the budget is approved before submitting a requisition. Further, ask recruiters to stay in touch with top contenders, since unforeseen delays during the selection process may damage your company’s reputation and ultimately hinder your ability to compete for the best engineering talent.

Complete Transparency

Recruiters need ammunition to woo high performers. So go beyond the job description by outlining the professional benefits of the project and the advantages of the work environment. Offer unabashed feedback after interviews, so recruiters enhance their ability to make precise matches by honing the selection process.

Collaborate and Unite

Consider offering joint referral or milestone bonuses or sponsoring an open house to garner interest within the contracting community.  Sharing resources and knowledge and developing a joint strategy is the best way for managers and staffing firms to attract and retain top-notch contract engineers.

Competition for top engineering contractors is a fierce today as ever.  By focusing on quality, not quantity, carefully constructing alignment and agreements with your staffing firm, and consciously managing communication before the hire, and feedback afterwards, you can build a world-class battle plan for acquiring and maintaining the best engineering talent.

Managers performing engineering recruitment need to evaluate a contract engineer’s commitment and work ethic in addition to their engineering skills. However, they often ask illegal questions to uncover relevant information. Unless each probe is carefully worded, it may violate Title VII of the Civil Rights Act of 1964 or a slew of amendments and other employment laws.

If you need more reasons to heed our advice, consider this: courts have been holding managers personally liable for violating federal, state and local employment laws. But don’t despair; it’s possible to legally extract the desired information, as long as you ask the right questions.  Here are some examples*.

Don’t ask how long veteran contract engineers plans to work or about their retirement plans to assess their longevity, because it’s an age-related question and workers over 40 are in a protected class.
Instead ask about their career goals over the next five years, because they’ll probably disclose their retirement plans.

Don’t ask when a candidate graduated from college to see if their knowledge is current.
Instead ask about their continuing education courses or if they’ve attended any seminars or lunch and learn sessions to see if they’re committed to lifelong learning.

Don’t ask about previous illnesses or sick days to assess a candidate’s reliability, because they may end up disclosing a mental or physical disability.
Instead ask: “How many days of work did you miss last year?”

Don’t ask whether a candidate has family obligations, flexible childcare or weekend activities to see if they can work late or on weekends, because the question indirectly solicits information about a candidate’s family status or religious affiliations.
Instead ask: “You may have to work late or an occasional Saturday, will that be a problem?” Be sure to ask the same questions of males and females, so you can’t be accused of stereotyping or making assumptions based on a candidate’s age or gender.

Don’t ask about a candidate’s accent or native tongue to see if they’re fluent in another language, because it’s illegal to discriminate against an individual because of birthplace, ancestry, culture, or linguistic characteristics common to a specific ethnic group.
Instead ask what languages they speak, or whether they’re fluent in Spanish, but only if it’s a job requirement.

Don’t ask if they belong to clubs or social organizations to see if they’re connected, because the question is too broad and some groups have religious or political affiliations.
Instead ask if they belong to any professional engineering groups or industry associations.

Don’t ask about parents or spouses to see if the candidate comes from an engineering family or background.
Instead ask: “Tell me how you became interested in the engineering field.”

Don’t ask about prior arrests to assess a candidate’s character because employers can only consider recent convictions that are work-related.
Instead ask: “Have you ever been convicted of fraud or theft?”

Don’t ask: “How long is your commute?” because you can’t choose candidates based on their mode of transportation or location.
Instead ask: “Our office hours are eight to five, can you work that schedule?” Or, “Would you be willing to relocate?”

Don’t ask whether the candidate is a member of the National Guard or reserves to see if they’ll be taking extended absences.
Instead ask: “Do you have any upcoming events that will cause you to miss more than a few days of work?”

Remember, employment laws apply to candidates for regular or contract positions. Be sure to review state and local laws and consult with human resources when drafting a slate of interview questions.

*Disclaimer: This article is presented for technical staffing informational purposes only and should not be considered legal advice.  If you have any questions or concerns, be sure to check with an employment attorney and/or the EEOC website.

By Joseph Salvucci

Every company confronts the essential question of how much core staff is needed.  Too few and you run the risk of diluting your core competency.  Too many and you wind up with bloated salaries and benefits you staffed up for during peaks. When the valleys occur, you sacrifice margins and/or deal with the demoralizing task of laying off excess staff.

So, what is the ideal balance between core and contracted staff?  While there are no one-size-fits-all answers, several questions help focus this analysis, including:

• Which are the staff you know you’ll need virtually all of the time?
• How volatile is your market?
• How costly are your salaries and benefits in comparison to the value the work provides?
• Are there certain types of specialists you know you need to always have on hand?
• Are there specialists you know you’ll need for months at a time, but only on a project-by-project basis?
• How hard are these specialists, and other talent, to find, when you need them?
• What are you customers’ expectations for turnaround?

Figure 1 shows a staffing model that is non-idealized. The red line represents project or business cycles. These rise and fall based on various market conditions, including economic upturns and downswings, seasonal swings, competitive pressures and sales wins and losses.

Figure 1: Non-Idealized Core Staffing Model – Too Much Full-Time Staff

The gray area represents your core, full-time employees. The red shaded area represents cycles where you are carrying core staff salaries and benefits without commensurate revenues. The white peaks represent non-core, contracted staff, where there is an efficient correspondence between the labor to be performed and the available work.

Figure 2 shows the inverted core staffing model. Here the red shaded area represents contract labor which could have been replaced with full time labor. Depending on the price of labor and benefits, and the difficulty of hiring and firing, this may make sense for some organizations, while others may save money by having more fully occupied employees and fewer contractors.

Figure 2: Inverted Core Staffing Model – Significant Dependence on Contractors

Figure 3 shows the “idealized” core staffing model, where core staff are occupied 100% of the time, and 100% of the peak workloads are handled by contract labor.

Figure 3: Idealized Core Staffing Model

In reality, most businesses are somewhere in the continuum between the models shown in Figure 1 (the non idealized core staffing model) and Figure 3 (the idealized core staffing model), with a desire to trend to the idealized core staffing model.

Lacey Stenson, COO of reThink Consulting, Inc., consults on issues of employee management.  She says, “We recommend contract employees:

• on a project by project basis;
• when the job is predicted to be seasonal and/or project based;
• to cover an temporary influx of work;
• when you need someone quick, e.g., an employee quit spontaneously without notice;
• if the work involved is confidential and cannot be delegated to an in-house employee;
• when the hourly cost of a contract is less than the cost of a salaried employee plus taxes, benefits and HR management time;
• for specific skill sets when it makes more sense to pay a contractor on an as needed basis vs. employing an expert full time on salary.”

Regarding finding the right balance, she adds, “Given the current state of the economy, many businesses are keeping a leaner staff of core employees to ensure they can make monthly payroll plus taxes and benefits without risking penalties from the IRS and to ensure their doors remain open. The best way to ensure you stay in balance is for the management staff to have an accurate and early pulse on the workflow of the current staff. This can be done by consistently engaging with department supervisors and getting an accurate reading of their department. By
creating and developing tracking and benchmark systems, management can monitor the influx in work against actual data.”

In summary, use contractors to keep your costs flexible so that when budgets are cut and projects are put on hold, you can remain profitable. During good times, the tendency is to staff up with contractors and then to convert them to direct employees. When the market dips, you either must carry them at great expense, or lay them off – dampening overall morale.

The benefits of optimizing your core staffing model include:

• Your core staff has a higher degree of job security. For 75 percent of the U.S. workforce, job security is the #1 need. Done correctly, you could have a no-layoff policy.
• You can better manage long-term profitability for your business enterprise.
• You attract the best talent in the contracting marketplace by paying the contractors an above-market premium. You can afford to do this because they are fully billable when on board. No holiday or vacation pay, no training costs, no corporate seminar costs, no sick pay, no unemployment compensation premium, and no cash drain when your engineers are on the bench. Studies show that 25 percent of the U.S. Workforce prefers premium pay over job security; sometimes contracting is the best way to get the best people.

The challenge is making sure you have one or more suppliers of contractors who can provide the talent you need when you need them. If your staffing company doesn’t understand your needs, or takes too long to supply the people you need, find another.

It was the shot heard ’round the employment world back in 1999, when the U.S. District Court ruled that Microsoft’s  long-term contractors were entitled to participate in the company’s tax-qualified employee stock purchase plan. While some companies responded by capping the length of contract assignments and scrutinizing the status of independent workers, co-employment risk hasn’t stopped Microsoft from utilizing more temporary employees, freelancers and contractors.

It’s estimated that Microsoft still utilizes about 70,000 contract professionals. This allows the company to quickly acquire knowledgeable experts for short periods of time. It also provides flexible staffing levels, allowing the organization to respond to changing market conditions.

As Microsoft spokesman Lou Gellos recently explained to BusinessWeek, “Our contingent workforce fluctuates wildly depending on the different projects that are going on. Somebody does just part of a project. They’re experts in it. Boom, boom, they’re finished.”

According to a survey of 1,248 firms by the American Management Association, 91 percent said flexibility in staffing issues was important. Moreover, 95 percent said that flexibility was being achieved through the engagement of temporary and contract employees from staffing companies.

A rise in employment-related lawsuits and laws like the Worker Adjustment and Retraining Notification Act (WARN), which requires companies with 100 or more employees to provide 60 days notice before a mass layoff, has discouraged companies from rehiring full-time employees. Instead, they’re utilizing more contingent workers, largely because they’ve been able to mitigate co-employment risk.

Full-time employment never returned to pre-recession levels following the downturn in 2001. After the latest recession, Mark Zandi, chief economist at Moody’s Economy.com, said that our “collective psyche has changed as a result of what we’ve been through. And we’re going to be different as a result.”

Twenty-six percent of companies use contingent workers to meet seasonal business needs. Another 10 percent use them to fill in for absentee workers. Others use contingent workers to get relief from rising benefit costs and regulations so they can compete in a global economy.

Companies like Microsoft meet talent shortfalls by deploying contractors with scarce technical skills all over the world. And given the reduction in full-time headcount, managers are increasingly turning to contractors for a quick injection of expertise in order to complete critical projects.

Companies aren’t the only ones looking for flexibility. Veteran professionals view contracting as a way to extend their careers and acquire new knowledge without enduring the stress of a full-time job.  According to a survey of 13,196 workers conducted by the American Staffing Association (see chart below), 41 percent chose contracting to achieve a flexible schedule, while nearly 60 percent said that that their contract work is helping to strengthen their resume. Respondents with little or no interest in a permanent job were more likely to have a least a bachelor’s degree and earn higher wages.

Figure 1: Reasons for Choosing Contract Employment

By: Leslie Stevens-Huffman

Were the first contractors the American builders and engineers who traveled to Russia to help rebuild the country after the Russian Revolution? By accepting 6 to 12 month assignments and offering their talents on a freelance basis, those early trendsetters may have unknowingly launched the professional contracting movement.

The roots of the modern staffing industry can be traced back to the years following World War II. However, the concept of free agency came of age during the 1970s as the U.S. transitioned from manufacturing to a service economy. It was during that time when employers ended the practice of lifetime employment by instituting mass lay-offs in response to the decade’s severe recession.

Managers needed flexible workers with a variety of skills to counter rising global competition. They also wanted relief from the burgeoning costs of employment-related regulations, benefits and litigation. By 1990, average daily employment in the staffing industry had grown to 1.6 million workers. It peaked during 2000 and 2005 at 3.21 million, according to the American Staffing Association (see chart below). In 2010, there were roughly 2.6 million contingent workers.

Some 90 percent of businesses used contingent workers during 2010. Roughly 40 percent of staffing industry clients engaged technical, information technology and scientific professionals, according to a joint study by Career Builder and Inavero Institute.

Today, the average American worker is 42 years old and has held 10.2 jobs over the course of his or her career. Experts predict this trend will continue, creating a workforce that is 50 percent contingent by 2012. In fact, Microsoft’s model may provide a glimpse into the future of corporate staffing. The company utilizes some 96,000 regular employees and 88,000 contractors to achieve its mission.

While some engineering professionals view contracting as a quick fix after a lay-off or a bridge to full-time employment, veterans often see free agency as an opportunity to enjoy greater flexibility and extend their careers into retirement. Contracting also helps them enhance their marketability and value by working on a variety of global projects.

In light of the increasing reliance on professional contractors in the U.S., engineering managers and staffing buyers identified these top four strategic priorities for 2011.

1. Risk Mitigation

Whether it’s protecting intellectual property, avoiding co-employment exposure or keeping the IRS at bay, managers planned to mitigate risk by instituting robust onboarding procedures and incorporating independent contractors into existing contingent workforce programs.

2. Performance Management

Managers need to optimize their investment in professional contractors. Therefore, they are launching formal performance management programs and offering bonuses and other incentives to bolster engagement and inspire outstanding achievement.

3. Workforce Planning

Managers are seeking additional opportunities to lower fixed costs. To this end, they are utilizing contractors in lieu of full-time employees, while being assured of receiving top notch talent amid critical shortages in some engineering disciplines. The answer is holistic workforce planning, which allows staffing firms and managers to explore future needs and calculate the ROI for both future full-time hires and contractors.

4. Retiree Programs

Managers plan to avoid debilitating brain drain and the loss of critical institutional knowledge by utilizing retired engineers on a contract basis.

Leslie Stevens-Huffman is a freelance writer in Southern California who has 20 years of experience in the staffing industry.

By: Leslie Stevens-Huffman

Even veteran contractors can feel a bit uncomfortable and apprehensive when starting a new project. After all, jumping into the middle of an engineering venture and bonding with a diverse group of unfamiliar teammates is like trying to board a moving freight train. The sooner a professional feels comfortable and confident in a new environment, the more productive they’ll be. Follow these six steps to make contractors feel like part of the team.

1. Give them a home
Contractors won’t be grounded or fruitful if they need to forage for a quiet place to work in conference rooms and cafeterias. Give them a cubicle, an e-mail address, a phone and access to the network as soon as they arrive. Co-locate them with teammates and critical stakeholders whenever possible, so they can nurture productive working relationships. And remember to provide the necessary resources, safety equipment and tools (including operating manuals for machinery, software programs, etc.) to help engineers get off to a fast start.

2. Show them respect
“Honor their skills by asking contractors about their strengths and work preferences,” advises Joanne Greene-Blose PMP, president and CEO of The Project Solvers of America, Inc. “Then use the information to strategically fit them into the project and team structure, instead of forcing them to work in an unfamiliar situation.”  Remember, contract engineering professionals bring a lifetime of knowledge and experience to the table, so take the opportunity to cultivate a reciprocal learning environment by openly soliciting their ideas and feedback.

3. Review the scope of work
Joel Kohler, a certified engineering project manager with 20 years of experience, spends several hours with new contractors reviewing the scope of work and making sure their goals and vision align with the project’s objectives. If a contractor will be joining a long-term enterprise, Kohler lets them review the project’s existing documentation and charter before getting down to work. This enables them to understand the project goals and history, as well as their individual roles and responsibilities.

4. Introduce them
“It’s not enough to give contractors a roster and force them to fend for themselves,” insists Kohler. So he personally introduces new contractors to key stakeholders and other engineering managers before asking the parties to collaboratively define their goals and develop a timeline and a process for achieving them.

5. Outline the rules
Engineers flourish when they understand their boundaries and limitations. Clarifying the chain of command and ground rules also prevents rogue teammates from assigning contractors extra duties or issuing directives that usurp the engineering manager’s authority. Savvy managers assign a coach or mentor to new contactors, so they have another trusted resource for questions and advice.

6. Include them
Copy contractors on e-mails, memos and project correspondence.  Make them feel like part of the team by inviting them to meetings and social functions, and engaging the entire group in team building activities.

“The key to managing mixed teams is to respect each member’s individuality while creating an inclusive environment,” notes Kohler. “Because you won’t inspire great teamwork and collaboration, unless you take steps to make sure that every member of the team is wearing the same jersey.”

Leslie Stevens-Huffman is a freelance writer in Southern California who has 20 years of experience in the staffing industry.

Here are some actual examples (or at least we’ve been told they are true).  Can you top these?

During an interview a candidate said, “Do criminal charges show up on my record? I was charged with assault of a police officer but the charges were dropped because I was found not fit to stand trial.”

A male sales manager was about to complete what would have been a successful interview with an attractive woman. That was, until she asked, “Do you think you would like me to tie you up?” The manager abruptly terminated the interview.

A candidate was asked, “Where do you see yourself in five years?” He replied, “In your job.”  (He didn’t get the job.)

One HR manager claims they several times have had, “candidates showing up in homecoming dresses or in bathing suits.”

When asked, “How did you hear about our company,” the applicant replied, “Well, I was in my Anger Management class, and I overheard you were looking for people….”

When asked, “Why did you leave your last company,” the applicant replied, “I have a problem with authority.”

We hope you’ll participate and send us some gems for us to publish in our next newsletter. As a token of our appreciation, we’ll award the best post submitted by April 15, 2011 a $50 Amazon gift card for you or your company.

Please leave your entries as comments below! Thank you!