As Christmas fast approaches, many sectors in the UK experience an uptick in demand for contingent workers and contractors.
Industries such as retail, logistics, and hospitality, in particular, rely heavily on temporary workers to meet the seasonal surge. According to the Recruitment & Employment Confederation (REC), demand for temporary and contract workers can increase by up to 20% during this period.
This increased demand is coupled with heightened financial pressures, as many contractors face rising costs and fewer traditional employment perks, such as holiday bonuses or year-end rewards. In fact, the same paper highlights that 55% of contractors report significant financial stress during this time. These circumstances present a unique opportunity for umbrella companies to not only retain contractors but also enhance their engagement by offering thoughtful rewards and recognition programs tailored to their specific needs.
The challenge of seasonal pressure
Seasonal peaks are often the time when contractors and contingent workers feel the strain of rising living costs, with the added pressure of navigating temporary work schedules. Contractors, unlike full-time employees, are rarely recipients of the kinds of year-end benefits that can cushion the financial blow. The Resolution Foundation points out that a substantial portion of contractors face financial hardship as they manage the added holiday expenses.
At the same time, umbrella companies face a retention challenge. With competition high, especially during the seasonal surge, 40% of contractors are willing to switch companies if they find a better offer elsewhere (Thewlis Graham Associates). This puts pressure on umbrella companies to go beyond just offering pay and benefits, and instead look for creative ways to keep their workforce engaged and loyal.
The power of loyalty-based reward schemes
One of the most effective ways umbrella companies can engage contractors is by implementing loyalty-based reward schemes. Traditional long-service awards no longer have the same resonance with today’s workforce, especially when dealing with contractors who may work with several companies throughout the year. Instead, umbrella companies should shift towards offering Loyalty Awards – a system where contractors earn points for continued service commitment to the umbrella company over time, regardless of whether they work seasonally or part-time.
With points available to spend on retail gift cards or physical products like home items, gifts and experiences, umbrella companies can make a real difference to a contractor’s life and alleviate their costs, especially important. These points can then be redeemed for valuable rewards that directly benefit contractors during high-pressure times like Christmas. Gift cards or discounts on everyday essentials are just a few ways in which companies can make a real difference to a contractor’s life. A survey conducted by Employee Benefits Magazine found that 72% of UK contractors prefer rewards that can be redeemed for necessities such as food shopping. These types of perks provide tangible benefits that can make a significant difference to a contractor’s financial situation.
Moments of recognition and celebration
Beyond financial rewards, umbrella companies should focus on offering moments of recognition that go beyond peer-to-peer acknowledgments. Personal milestones such as birthdays, project completions, or work anniversaries provide excellent opportunities for companies to celebrate their contractors and reinforce their importance. Offering small but personalised rewards for these moments can significantly enhance a contractor’s connection to the umbrella company, fostering loyalty and engagement.
The Institute of Employment Studies reports that 65% of contractors feel more loyal and connected when they receive personalised recognition, particularly during times of increased workload, like the holiday season. This type of personalised acknowledgment shows contractors that their contributions are valued and can go a long way toward fostering long-term loyalty.
Seasonal rewards to boost financial stability
Given the financial challenges many contractors face during the Christmas period, seasonal rewards can be a particularly impactful way for umbrella companies to engage their workforce. Seasonal rewards could include offering extra points during the Christmas period that can be redeemed for retail items, gift cards, or even holiday-specific products. These perks not only offer immediate financial relief but also create a positive association with the umbrella company during a time of financial stress.
Partnering with retailers to provide exclusive discounts on essentials such as groceries or holiday goods can also be a strong motivator for contractor retention. Indeed, the multi-national insurance service provider, Willis Towers Watson reported (in The REC) that companies offering targeted seasonal rewards see a 20-30% increase in retention rates among their contingent workforces. These programmes help stretch contractors’ income, making them feel more financially secure and more likely to stay with their current umbrella company.
Technology as a key enabler
In today’s gig economy, contractors need to feel connected to the umbrella companies they work with, especially during peak periods like the holidays. One way to ensure engagement is through mobile-friendly platforms that allow contractors to access their rewards, points, and recognition on-the-go. 80% of UK contractors prefer using mobile platforms to engage with their reward and recognition systems.
Mobile apps provide real-time visibility into the perks contractors are earning and ensure they feel connected and valued, even when they are working remotely. Offering on-the-go accessibility enhances the overall experience, reinforcing the contractor’s decision to stay with the umbrella company.
Future-proofing contractor engagement programmes
Looking beyond the immediate holiday season, umbrella companies must focus on future-proofing their reward and recognition programmes. The rise of the gig economy and the increasing demand for flexible working arrangements mean that companies will need to adapt their programmes to be more flexible and responsive to contractors’ evolving needs. Offering flexible rewards that can be claimed throughout the year and aligning these rewards with contractors’ personal and professional values, will be key to maintaining engagement.
There’s no doubt that recruitment and umbrella companies have a huge opportunity to better engage contractors by offering loyalty-based rewards, celebrating personal milestones, and providing seasonal perks that directly address the financial and emotional pressures of the holiday season. By implementing mobile-friendly and adaptable programmes, companies can foster long-term loyalty and retain their most valuable contingent workers, even in a highly competitive landscape.
AJ Alao is a seasoned Engagement Consultant and a dynamic advocate for employee well-being and organisational growth. AJ brings a wealth of experience from prior management roles at DataGuard and Cold Outreach Agency, where he supported startups in achieving sustainable growth.
Additionally, AJ has served as an advisor in the past with The Careers & Enterprise Company, contributing to efforts that prepare young people for a rapidly evolving workforce.
