If you’re familiar with the beautiful state of Melbourne, you’d know that one thing the city is famous for is it’s unpredictable weather. The old saying, “If you don’t like the weather then wait 5 minutes” rings true when considering our weather patterns. Melbourne is renowned for changing it’s weather every fifteen minutes so much so that organisations like the Bureau of Meteorology now refers to it’s forecasts as “climate forecasts” in order to not be held accountable for potentially mistaking their forecasts relating to our otherwise unpredictable weather.

It seems that our economy is not much different from the Melbourne weather these days, with forecasts changing from sunny bright future to wind and storms on daily basis. In fact, the nature of business today is far more dynamic than any other time in history with new research by John Campbell, Martin Lettau, Burton Malkiel, and Yexiao Xu showing that while there's no trend toward increased volatility at the market level, there is a significant trend of increasing "idiosyncratic" volatility at the individual firm level. This means that an organisation that is experiencing smooth sailing today, is more likely to experience intense head winds tomorrow.

This global economic ‘climate’ change has had a great impact on the job market, making it more unstable and unpredictable. Such a change means that recruiting resources in a permanent capacity and seeking to predict market needs is harder than any other time in modern history.

Many companies no longer have the capacity to predict and forecast years ahead, and the nature of publicly listed companies results in firms really only having 20/20 vision of the next 3 to 6 months. Therefore they can no longer base their hiring decisions around long term goals. This market reality is endemic of both our financial and cultural operators and means long term strategy is hindered in all facets of business operation. As a result of these economic extremes, short-term contacts and temporary employment opportunities have replaced the permanent landscape within the job market of today.

Sort-term contracting provides employers with the ability to hire highly skilled individuals that are a perfect fit for the task at hand, instead of delegating the work to a permanent staff member, who may or may not have the same experience which can be quickly and readily imported from external and fluid resources who have learnt their lessons at others expense.

Contracting also offers greater flexibility around the commitment to resources. If a contractor is not one hundred per cent the right fit, they can be easily replaced, while firing a permanent employee who no longer delivers to the expectations of the business can become a tiresome, highly bureaucratic and essentially expensive process.

While this may sound like a selfish solution to the market instability issue on the employers’ part, temporary work and contracting does benefit the employees as well.

Not only do contractors generally get higher pay in comparison to that of their permanent brethren, they also get to work on a wider range of project and gain real experience in a wider spectrum of their profession. This makes them more desirable for employers and opens more doors to far more opportunities as well as allowing them to progress their careers faster.

In short, given the nature of the market and volatility of corporate Australia, it does seem that contracting based resources does in fact benefit both contractors and employers who have been pushed to enter the stage of the new contracting and temping trend. This trend has resulted in creating real benefits to both employers and employees.