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Contingent Workforce Management: Everything an Employer Should Know

Contingent Workforce Management: Everything an Employer Should Know

Over the last couple of years, the labor market went through quite a lot of turmoil due to the global outbreak of COVID-19. During the ongoing crises, various lockdowns, market shifts, and the mass exodus to remote positions, companies were forced to become much leaner, faster, and nimbler.

As a result, we have seen a huge expansion of the so-called contingency workforce, or in other words, a vast labor pool whose members are hired by companies on an on-demand basis to solve specific immediate problems.

However, keeping in mind we are still talking about a relatively fresh employment model, a contingent workforce still leaves too much ground uncharted. Let us take a look at some of the most critical considerations you should take into account before resorting to this strategy and using contingent teams.

The Definition of Contingent Workforce

As we have briefly mentioned in the introduction, a contingent workforce represents a group of people in various employment categories that are brought to your company for a limited time to address some specific problem. Their employment can be limited by a fixed employment time, type of work, or the length of a project. Some of the most notable examples of this popular arrangement come in the form of the following mentions:

  • Independent contractors
  • Temporary staff
  • Third-party providers and agencies
  • Casuals staff (e.g., seasonal workers in the hospitality industry)
  • On-call staff (temporary labor for demand surges)
  • Zero hour staff (a type of contract that doesn’t guarantee workers a specific salary or number of work hours)

Hybrid Employment Options

It should be mentioned, however, that these very terms are flexible so we can find additional variations on these six mentions. Furthermore, companies have recently been using the practice of putting the contingent staff on indefinite contracts creating a middle ground between traditional employment and these new models. These options, in turn, entail a new set of challenges like, in the case of foreign staff, navigating w8ben forms, and finding a proper legal framework for the employment. However, these issues are usually sorted out with the help of a third-party vendor.

The Benefits of Using Contingent Staff

By now, it should be obvious that using a contingent workforce presents a very tangible logistical and legal challenge. Let us now quickly take a look at the benefits that are associated with this process to see if this arrangement is worth your time in the present-day post-COVID world.

Higher Business Responsiveness

Even if we take out of the equation all the turmoil brought upon us by the Coronavirus, we will see that the present-day business world is incredibly fast-paced. With things as they are, failing to use every market opportunity can set one company far behind. A contingent workforce helps businesses fill in the eventual productivity gaps and pursue opportunities without waiting to develop infrastructure.

Lower Overall Costs

Developing internal infrastructure, providing employee training, and acquiring assets necessary for running these new departments doesn’t only require a lot of time, but resources as well. Speaking in overall numbers, using contingent workers to address specific and time-limited tasks presents a much simpler and money-efficient solution.

Access to Talent outside Your Reach

Let’s take for example IT-specific tasks like building a website or managing a company database. All these efforts require a very high level of expertise but unless your company has a stake in the IT market there is very little chance you will be able to lure top-tier talent under your roof. But, if you offer them a one-time gig that will look good on their resume? Sure, why not. This way, you are no longer limited not only by your native industry or business scale but by national borders as well.

The Things to Take into Consideration

As we can see, hiring a contingent workforce offers a lot of interesting benefits that raise your business’s chances of survival in the incredibly competitive present-day business environment. But, all these perks don’t come without a couple of challenges you must take into account before making the final decision.

First and foremost, there is the issue of remote recruitment that, due to lack of traditional assets, does give HR staff more variables to work with. Similar problems can be found in terms of engagement, team cohesion, inclusion, establishing sensible workflow, and focusing on specific objectives. The businesses leveraging the contingent workforce need to invest a lot of effort into bringing these workers into the loop as fast and painlessly as possible.

And then, there are the logistical and legal challenges we have mentioned above.

In Conclusion

In the end, we can only sum up that, in this volatile, fast-paced, and unpredictable business environment we currently inhabit, contingent workers can go a long way in addressing temporary issues and helping businesses to quickly adapt to current market conditions. This strategy also sets up perfect foundations for scaling the company up without necessarily adjusting the infrastructure. Still, all these perks come with equally as many challenges so we suggest using contingent workers deliberately, and to solve tangible, specific problems.

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by Lilly Miller // Lilly Miller is a freelance writer, who focuses on the latest business trends, commercial design, and environmental issues. Settled in Sydney for the time being, Lilly shares home with two loving dogs and a gecko named Rodney. You can find her hanging out on Twitter.

Opinions expressed by contributors are their own.