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Free of charge: The Forgotten Workforce


A joint research project of Monash University and Entity Solutions, this report looks at findings about the attitudes to the work of freelance consultants and those that engage them. The research has focused on face-face interviews with independent freelance consultants working in the IT industry and, a survey of the businesses that engage them. (PDF file, 14 pages, 300 KB).

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Unformated preview of the document: 'The Forgotten Workforce' (Part 3):

(Campbell, Watson and Buchanan 2003; Hall 2002 and 2006). However, while there is
strong evidence of the historical importance of contractors in Australia, actual statistical information
has really only available from the Australian Bureau of Statistics (ABS) in a broadly consistent and
comprehensive way since 1998 from the Forms of Employment survey (FOES). Using this data,
Waite and Will (2001) estimated that, in 1998, between 26 per cent and 41 per cent of the .8 million
self-employed contractors met the criteria for dependent contractors. ABS (2004) FOES data
revealed that self-employed contractors were the second largest group (24 per cent) of nonstandard
workers, followed by fixed-term employees and labour hire employees (both at around 9
per cent). More precise data gathering since November 2006 now suggests that, of the 1.5 million
people employed on a contract basis, 1.1 million were employees (ABS, 2006). Self-employed
contractors thus form the second largest of the non-traditional forms of employment, with around
0.8 million persons or 8 per cent of all employed persons in 2004. Potentially added to this group
are labour hire employees numbered about 0.3 million in 2004, representing 3 per cent of all
employed persons. Furthermorel, this form of non-traditional work increased in both absolute and
relative terms between 1998 and 2001 (ABS, 2006). Overall then, despite incomplete knowledge
as to actual numbers what is clear is that the independent contractor workforce is an increasingly
important sector of the Australian workforce.
Our current program of study consists of two complementary approaches: an online survey of
organizations that engage independent contractors, and a series of 25 in-depth interviews of
practising independent contractors1 concentrated within the IT sector. Both online survey
participants and interviewees were accessed through the website invitations from the two industry
partners in this research, Entity Solutions (a contract management company/Professional
1 *Note that the term contractor in the rest of this paper to refer to independent contractors
Engagement Services Company) and ICA (the Independent Contractors Association of Australia).
More detailed explanations as to methodology will be available shortly. In the meantime, we
present the preliminary findings of these studies to provide insights into who the contractors are,
who is best-suited to contracting, and how contractors should be managed. We then present a
series of recommendations for contractors and managers.
Who are the Contractors and the Firms that Engage their Services?
It is immediately apparent from our online survey results presented in Figure 1 below that although
contracting is a widespread phenomenon, it is more highly concentrated in certain industries. Of
our 87 respondents, 11 (just under 13%) were in the Communication Services industry. This
largest group was followed closely in size by the Manufacturing, Finance & Insurance and Property
& Business Services industries (just under 10% each). The other represented industries are
Mining; Electricity, Gas & Water; Construction, Wholesale & Retail Trade; Transport & Storage;
Education; and Recreation.
Figure 1: Industry of Online Survey Respondents
The 25 contractors interviewed were from a much more homogeneous grouping with
Communication Services and Contractors accounting 22 or 88% of the contractors.
Recruitment practices for organisations wishing to engage contractors are shown in Figure 2 and
reveals that this occurs from a variety of sources, in several different ways. Of the 87 respondent
organisations, most rely on a blend of traditional, formal methods – such as recruiting and the use
of Agencies together with more informal means such as work networks, word of mouth and the
recommendations of others. Interestingly, former employees also appear to be an important
source of contractors; these workers were recruited either by having the employer contact them or
when they contacted their former employer.
Figure 2: Online Survey - Methods for Recruiting Contractors
Figure 2A adds another dimension to these results with an indication of the importance of these
sources examined using a 1 to 7 scale on the Y axis reflecting a 7-point Likert scale where 1 is 'not
at all important' through to 7 which is 'extremely important'. Here we see the that while an
organisation may have preference for a particular set of recruitment sources

Unformated preview of the document: 'The Forgotten Workforce':  Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9

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