KEY POINTS:
Tony Wai knows what it's like to be on both the jobseeker's and the the employer's side of contracting.
He knows that while it is a time- and cost-effective option, it can also be arduous and disappointing for both parties.
In mid-July this year, Wai launched a new online contractor recruitment company, crackerjacks.co.nz,which aims to iron out the hassles of contracting recruitment.
The New Zealand contracting industry is growing - particularly with recent redundancies arising from the credit crunch - and Wai estimates it is worth around $350 million a year.
"It's an industry where a lot of money is being paid out, and we saw ways people could save," Wai says.
He describes Crackerjacks as a "channel extension" - bringing contractors and businesses together without being restricted to their respective recruitment agents. Employers seek talent from registered "Crackerjacks" - the contractors - who in turn receive the tools they need to secure and manage great contracts.
"We are not a job board; we are an online recruiter,"" says Wai. The company acts like a recruitment company, he says, but charges much less.
Wai thinks he picked a good time to launch: the company grew by 50 per cent in September alone.
While he suspects some of the site's members are people who recently lost their jobs in the finance sector, he says there is also a pool of "hard-core" contractors who will always be in demand.
"People are contracting because they want to work to live, not live to work. They want to be in control, they want to make more money or they think they've already proven themselves," Wai says.
Employers opted to employ contractors to cover staff members' leave, to work on a project for a set time or to tide the company over when it loses an employee and does not have time to fill the position through the regular recruitment process.
Wai says it can be cost effective to use contractors, particularly for small businesses, as it reduces their administrative burden in payroll and removes constraints imposed by legislation such as the Holidays Act and the Parental Leave and Employment Protection Act.
"It's very much 'you are here for this amount of time to complete this job'. It's taking out the infrastructure costs."
But through his experience at the head of several New Zealand companies, Wai realised the cost of sourcing the contractor - especially at late notice - was exorbitant and unrealistic for small businesses.
"Really the only option is to call a recruitment agency, and then you are effectively a price-taker. They will tell you how much you need to pay them, and you meet them on the job."
An agency can charge a company around $30,000 in fees for a 12-month period, and on top of that, it's not uncommon for the contractor to demand $50 or more per hour.
"We saw the need to change things."
Crackerjacks charges employers $500 a month for a full-time contractor for up to 12 months, when the fee is capped. This can save the company up to 80 per cent of the fee charged by a traditional agency, says Wai.
Being online means Crackerjacks requires fewer staff and less office infrastructure, and Wai is working to link to other popular online communities such as the networking site grownups.co.nz.
Wai knows the site is tackling a highly competitive market but says Crackerjacks' step-by-step recruitment process is unique to New Zealand. He says he has secured patent-pending status for it.
While he believes there's no easy time to set up a company - cashflow being the key hurdle - Wai says it's easier to launch when people are ready for the product or service.
"Contracting five to 10 years ago was quite quirky, but it's much different today as people are looking for different options."
That said, there was still a bit of negativity surrounding the industry, as horror stories of useless contractors or unreasonable employers have given it a bad name.
Crackerjacks aims to strengthen the relationship between both parties by reference-checking candidates and using a quality-performance rating system to give businesses confidence in the candidate pool. At the end of the contract, employers give contractors feedback on their profile - only the contractor can read the constructive criticism, but positive comments are open to viewers. This also helps contractors build up their profile and reputation.
Wai says it has been challenging to get businesses and contractors to use the website, as there is still a fear of trying something new, and "we don't have million dollar budgets to do a big campaign", but he believes the company has the right people on board to give it credibility.
Wai, who calls himself the managing director, has worked in senior finance roles in some of New Zealand's largest companies including Fletcher Challenge and DB Group.
He also spent two years as chief operating officer of Emerald Foods (Movenpick and NZ Natural icecream) and led the company through an important growth phase.
He has employed an experienced human resources manager, Helen Sedcole, to cover that side of the business. Sedcole has held senior HR roles in Carter Holt, Goodman Fielder and The Warehouse.
Frane Karaman, Wai's chief technical officer, has 20 years of experience in information technology and has worked on big-name corporate information communication technology projects in New Zealand, Australia and Europe.
The site now has more than 400 contractors registered, and many businesses have hired candidates.
Wai says he aims to take the company to Britain and Australia in the near future, but is wary of spreading the company too thin.
"We see ourselves as primarily New Zealand - and unique to New Zealand."
Contractor for hire
* An estimated 30,000 contractors use agencies in NZ.
* Average contracts are typically 6-9 months in length.
* Traditional agencies charge businesses 20 to 35 per cent on top of the contractor's rate.
