As far back as the 1960s, temporary workers were no longer limited to clerical work or other “blue-collar jobs.” Skilled contingent workers in engineering, accounting, programming, and other professions were hired to fill in roles for employees who were on sick days, taking a vacation, or to increase capacity during peak periods.
Today, the role of the contingent workforce has rapidly grown to be one of the crucial drivers of business success. Research conducted by SAP shows almost half of workforce costs are spent on contract workers, and 55% of companies cannot conduct their regular operations without hiring contingent workers.
A contingent workforce is more than just an alternative option. In this post, we discuss how a contingent workforce gives businesses a competitive edge.
Who are contingent workers?
Contingent workers are people who work for an organization without being hired as their employees. They provide their services for a fixed period of time, usually on a project basis.
Examples of contingent workers are freelancers, consultants, part-timers, and independent contractors. They are also sometimes referred to as gig workers, external workers, contingent labor, or outsourced labor, whereas a contingent workforce is also known as an external workforce, a flexible workforce, or an extended workforce.
Contingent worker roles can include seasonal hires and interns, customer service representatives, and creative roles (like graphic design, audio production, writing).
They can also be experts with highly technical skills, like SQL specialists, IT engineers, and information security professionals.
Independent contractors also include project managers, product managers, and interim managers who are often sought after to lead projects and teams.
Contingent workers can take on assignments that last as little as a few hours, or as much as a couple of years. They can work remotely, or they can work on-site, as needed by a business.
Why do businesses rely on them so much?
Now that we know who they are, let’s explore the advantages and challenges of hiring contingent workers.
Cost savings
Employing contingent workers can save companies a lot of money on fixed expenses they would otherwise spend on traditional employees.
Unlike a permanent employee, a contingent worker does not require additional expenses like taxes, medical benefits, pension contributions, employee benefits, bonuses, and other company benefits associated with hiring staff on a permanent basis.
So while it may feel like independent contractors and consultants charge a lot, overall, companies reduce costs when they hire temporary workers.
Additionally, contingent employees are hired only when needed – so a company will only need to pay for someone with the required skills for as long as they need them.
Fast access to specialized skills
Based on research from the Society of Human Resources (SHRM), it takes 36 days on average to find a new employee.
For some roles, particularly highly skilled and specialist positions, finding and hiring an employee can take 3 to 6 months. New hires will then spend some time going through training and onboarding before they can work at full capacity.
Many employers find that hiring contracted employees is an excellent way to fill existing skills gaps quickly because the hiring process for contingent workers is a lot shorter. Experienced independent contractors are often available at a short notice. You find them, negotiate a project, and they can get to work soon after. The HR team won’t need to make sure contingent workers go through the training and onboarding processes that full-time employees do.
Fuels innovation and growth
Contractual workers don’t spend much time working for one employer, so they tend to have experience working on a range of projects. They are often exposed to various methods or processes related to their skills, which is a potentially huge advantage for the companies who hire them. The experience they’ve gained will allow them to offer fresh perspectives and make improvements.
Contingent workers also allow companies to give new approaches and adventurous ideas a trial run. They can hire the contingent staff they need on a temporary basis to execute a new venture without a long-term commitment.
Provides flexibility during crucial periods
Temporary staff are easier to find and are only hired on an as-needed basis. Employers won’t have to worry about being tied to contingent workers beyond an urgent but short-term need.
Businesses can hire contingent workers to pick up the slack when they are suddenly overwhelmed with work or hire just a few workers when work demand is low.
Technical experts or highly skilled workers are also often called in for a short-term assignment or specific project. In contrast to permanent employees, they can be found quickly and can begin work on assignments immediately without having to undergo orientation and training. Temporary skilled workers are also highly cost-effective because, although they can be expensive, their skills and experience make them worth the investment.
Provides access to a wider pool of talent
When talent is scarce locally, remote workers give businesses a bigger pool to choose from. Similarly, businesses that are open to remote contingent workers have the option to hire top professionals from all over the world.
Finding a remote contingent worker is a lot easier as well – when businesses can hire from anywhere in the world, the faster they’ll be able to find their expert.
Common challenges in hiring and working with contingent workers
The potential benefits of using contingent workers are many but there are also challenges in hiring and working with contingent workers. Some common challenges include:
Availability
It can be easy to find an independent contractor with the specialized skill that you’re looking for, but they may not always be available when you need them. They may be in the middle of contract work with another company, or the length of your project may overlap with another.
Confidentiality
Contingent workers will likely work with your data and have access to confidential information. There is always a risk that some information is leaked to the company that they work with next. One way of avoiding this is to make sure that a contingent worker has a trustworthy reputation.
Control
Managing contingent workers is quite different from managing core employees. There is some loss of control over how tasks are performed. Contingent workers can be assigned tasks and imposed deadlines, but you cannot tell them how to do their work.
What to consider when hiring a contingent worker
With the challenges of hiring and working with contingent workers in mind, here are some tips for a glitch-free engagement.
Consider remote
If the job isn’t on-site and can be done online, consider hiring remote professionals. The talent pool will widen significantly, and you’ll have a higher chance of finding an available professional with specialized skills.
Have a screening process
Screening employees is an important step whether or not they are temporary. Conduct a complete background check and learn about your potential hire from their previous employers. If security and confidentiality are particularly important in the assignment, include questions related to trustworthiness.
Know when to hire
Although there are a lot of pros to hiring contingent workers, it’s important to know when hiring them is a more cost-efficient solution.
Here are some examples of when a contingent worker is a good choice for your business:
- When you need experts and specialized skills such as data mining, software programming, and project management.
- When you need help during particularly busy times for your business.
- For tasks that take just a few hours per week and don’t justify hiring a full-time employee.
- When the worker will not require close supervision.
