Keeping the hot seat warm

By JULIE MIDDLETON

Sandra Goodwin works seven or eight months of the year. The rest of the time she enjoys gardening, travelling, art deco design, pottery, and sewing. And after she's spoken to the Herald, she's going to sand down an old oak table. Work-life balance? You bet.

Goodwin trained as a journalist before completing a bachelor of commerce degree and moving into marketing. She's a veteran of full-time jobs with Unilever, Clear Communications and Tip-Top.

However, she had myriad interests outside work to which she wanted to give more time. Eventually, there was a decision: "I didn't want to work full-time," explains Goodwin, 37, who lives with her husband Stewart Martel in the Auckland suburb of Three Kings.

Part-time marketing work was hard to find, so she decided to give contracting - high-level, short-term periods of work - a try.

Her first contract job was three months doing promotional work for vitamin company Nutra-life, filling in for someone overseas. The learning curve was steep, especially having to adapt quickly to the company's work habits.

That was three years ago, and since then Goodwin's been the hired gun for companies ranging from New Zealand Dairy Foods to Goodman Fielder and Kimberley-Clark: "It suits me and my situation," she says.

At the moment she's between contracts, but knows that as soon as she's in the market again, her agency, Auckland-based OCG, will have something lined up.

The British call people like Goodwin interim managers; Americans label them free agents and New Zealanders contractors or leased executives. The premise is the same: top-flight professional people selling their skills for a temporary period.



So where are the contract jobs?

Contracting was born from the Rogernomics shakeup of the New Zealand economy in the 1980s and the 1987 sharemarket crash, says Kevin Chappell of leaser Executive Taskforce. Companies forced to keep staff numbers down contracted out all but their core activities, using contractors to boost specific projects.

Contracting - don't confuse it with temping - offers numerous options: you might be supplying a particular service or managing a project. That may take several days or several years, or just a few days a month. It's competency-based - a way for companies to inject high-calibre talent exactly when and where it's needed.

The traditional areas for contractors are finance and IT, and Chappell estimates that 45 per cent of his contractors fall into those categories.

The balance covers technical, logistical, supply chain, health sector, not-for-profit sector and marketing jobs. The biggest growth area is human resources.



"There is a huge amount of project work around, especially in services and manufacturing," says Carmen Bailey, a director and consultant for leasers Emergent.

She has also noted a trend for companies with marketing project work to seek short-term contract help, something that confidentiality fears used to preclude.

Rachel McNaughton, an Emergent consultant specialising in accounting an IT, says there's a shortage of junior accountants for contract posts.

A more recent development is the contract CEO. After Problem Gambling Foundation head Ralph Gerdelan was last year found to have spent the agency's money on gambling, food and booze, contract CEO Susan Macken was installed to hold the fort.

These people can earn top money: People acting as change agents through Emergent can score payment of $1800 to $2000 a day.

Are contractors self-employed, then?

Contracting is a form of self-employment - which means getting to grips with issues such as tax, and funding your own training and development.

"A lot of people have their own network so they contract direct," says Bailey. "They will use an agency such as ours to be their marketing agency when their own workload is light."

But it's more common for contractors to work through a consultancy: the consultancy bills the company, taking its cut of 20 to 30-odd per cent, and then the contractor bills the consultancy. Payment is most commonly per hour or day.

How long do contracts last?

Executive Taskforce's Chappell has just analysed his contractors' statistics over the last year, and says that engagements are three months on average. About 25 per cent are six months and over, and just seven per cent extend for longer than a year.

So what are the benefits of contracting?

For most contractors, a better balance between work and life, and higher rates than permanent staff.

Contracting is generally a politics-free zone: you are an outsider, a problem-solver to get in, do the job, and get out. But you still get work that adds to your resume and your skills.

Motivation also increases, report contractors: working for yourself, your commitment is to yourself rather than someone else.

What are the downsides?

Erratic money. It's recommended that contactors put some of every cheque aside for lean times.

There's no subsidised company superannuation, sick and special leave, company cars or obvious opportunities to rise up a particular corporate ladder.

You also have to watch out for the odd agency that takes a cut for doing very little, says Don Smith, the managing director of IT recruiter Woodbine Associates New Zealand.

And when there are more people than jobs, "contractors find it very difficult to re-enter permanent employment: employers are negative about the contractor's motives, and will usually select a permanent employee before an ex-contractor".

What are the benefits to bosses of hiring contractors?

Flexibility, efficiency, innovation and fresh skills, according to a 2001 survey by the New Zealand Employers' Federation.

Bosses might pay a 10 to 20 per cent premium for a contractor, says Chappell, "but you don't pay for down time, or sick pay or special leave ... and there are no obligations under the Employment Relations Act".

What sort of personality is best suited to contract work?

Research company Cubiks did a study in 1999 using personality testing that revealed contract managers in the United Kingdom were more autonomous, risk-taking and power-hungry than traditional, hierarchy-climbing managers.

"They tend to see themselves as more competent and confident in a leadership position than the average manager sees him or herself," says the study. "They strongly prefer to work in the absence of externally-imposed rules and structure, simply ignoring the rules or making up their own.

They are organised, like to make fast decisions, value planning, like change, and have a strong "completion streak".

The ideal contractor is flexible and "has a strong technical skill base - they can deliver," says Emergent's Bailey.

Chappell says that people who have entered the workforce from the late 1980s tend to be well-suited to contract work as they have never bought into a job-for-life mentality, and understand that they are only as good as their last piece of work.

They also understand the need to work independently.

Emergent's McNaughton adds that contractors have to be comfortable with a certain amount of flux: they may not have work on every day of the year they'd like to.

"I've got a couple of contractors who are so needy [for security] that they are looking for work six weeks before they've finished their assignments." That, she says, does not help their focus.

"You've got to realise that this is a just-in-time business. We could have nothing [on offer] today and 10 opportunities tomorrow."

Contracting, she says, is also probably a "less ideal solution" for those with large and immediate financial commitments, a large mortgage, sole-breadwinner status or all three at once.

That doesn't mean it's only a younger worker's game. McNaughton says Emergent's contractors range in age from early 20s to 60-something. "There are some 60-year-olds with far more energy than 30-year-olds," she observes.

Younger people in areas such as accounting, says Bailey, will also use contracting as an try-before-you-buy option while they make career decisions.

So how big is the contracting market - and how healthy?

There are no solid figures on the size of the contracting market, says Chappell. However, work for contractors slowed sharply after the World Trade Center attacks in September 2001 led to economic uncertainty all over the world. Things are now back to normal, he says.