Mitigating Tenure Risks: Considerations for converting contingent workers to full time employees

In the modern business landscape, organizations are continually seeking innovative ways to mitigate risks, enhance operational stability and provide cost efficiency. One crucial area of focus is employee tenure—ensuring that skilled workers remain with the company for extended periods.

This can be particularly difficult for the flexible workforce. A popular strategy to address this challenge is converting contingent workers, such as freelancers, contractors, and temporary staff, to full-time employment. A recent research report from Guidant Global showed that this is the most common approach for mitigating risk with tenure policies (35% of respondents). It also had the highest level of planned approaches of those planning initiatives for the future (32% of respondents).

Converting contingent workers to full-time permanent employees offers several benefits that collectively help organizations manage tenure risks more effectively.

Talent and Knowledge (IP) Retention: Retaining top talent is a leading goal for many organizations to avoid the costs related to recruitment, training, knowledge transition, onboarding, and any potential temporary reductions in productivity. In fact, a survey from SHRM in 2022 estimated that the average turnover costs lies between 6 - 9 months of an employee’s salary. By offering permanent employment, companies provide job security and benefits that are attractive to high-performing individuals.

Commitment and Stability: Full-time employees are more likely to develop a long-term relationship with the company, fostering loyalty and reducing the likelihood of abrupt departures. This stability is crucial for maintaining continuity in operations, especially in roles that require specialized skills or knowledge.

Enhanced Productivity: Full-time employees often feel a sense of belonging and investment in the company's success, which can lead to increased engagement, commitment, and productivity. Moreover, permanent employees may participate in team-building activities and contribute to the organizational culture, improving overall performance.

Risk Management: Converting contingent workers to full-time roles allows companies to manage risks more effectively by ensuring a stable and compliant workforce. This approach reduces the likelihood of unexpected disruptions and legal challenges, supporting long-term business stability and growth.

Cost Efficiency: Transitioning existing workers instead of attracting new workers, not only because there is no need to pay to recruitment costs. There is also less admin and training needed, not to mention the increased chance of a successful member of staff where an organization has effectively carried out a ‘try before you buy’ with this employee.

Strategies for Converting Contingent Workers to Permanent Staff

There are a number of key strategies to ensure the successful transition of contingent workers into full-time employees:

Identifying and Evaluating the Right Candidates to ‘Keep’

Not all contingent workers are going to meet the long-term needs of your organization. Begin by identifying contingent workers who have consistently demonstrated high performance, reliability, and alignment with the company’s values and culture. Evaluate if these candidates possess the necessary skills and potential for long-term success within the organization.

Proactively Communicating Benefits to Converting to Permanent

Contingent roles often pay at a higher rate which might make a transition a less appealing option. Clearly and proactively communicating the benefits of transitioning to a permanent role at the first interaction is going to be essential to maximize chance of uptake.

Highlight key areas such as job security, access to benefits, career development opportunities, and the potential for professional growth within the company.

Offering Competitive and Relevant Packages

To retain this top talent, offer competitive compensation packages that include salaries, pension contributions, paid time off, and incentives. Ensure that these packages are on par with industry standards and reflect the value the worker can bring to the organization.

Creating a bespoke ‘Temp to Perm’ Program

Even if they have been working at the organization for some time, it’s important to still offer comprehensive onboarding and training programs.

Working with your MSP, you can create a program to help new permanent employees understand the transition, including their roles, responsibilities, and the company’s expectations. Additionally, it will ensure ongoing support and resources to help them succeed in their new positions.

Promoting Inclusion and Engagement

Integrate a new permanent employee into the organizational culture by encouraging participation in team activities and events, and professional development initiatives. Foster a sense of belonging and engagement, which can enhance their commitment and productivity.

Next Steps

Transitioning contingent workers to permanent roles is a strategic move that can significantly benefit the organization. By identifying high-performing candidates, clearly communicating the advantages of permanent employment, offering competitive compensation, facilitating smooth transitions, and promoting inclusion and engagement, companies can build a committed and skilled workforce poised for long-term success.

Guidant Global provides global workforce management solutions that help companies find the best contingent and permanent talent. Contact us for more information and advice on reducing costs while boosting organizational culture and performance.