Traditionally, contingent workers were seen as a supplement to a company’s workforce. They came in, did a job and then they left. They were typically sourced in times of need by the organization, giving them an extra pair of hands when they didn’t have enough employees to fulfill demand.
This view has changed dramatically in recent years. Contingent workers are no longer just a resource to turn to when a business starts to struggle with demand. Instead, this highly valuable workforce brings hot skills, industry knowledge and expertise that a business might ordinarily struggle to find, or afford, from traditional employees.
Contingent workers are now a core component of many organization’s workforce.
In fact, according to data from Gartner, 32 percent of companies replaced salaried employees with contingent workers to cut down on costs, and many others did so as a means to fill important skills gaps.
Embracing contingent workers and utilizing this highly-skilled and flexible workforce can bring real benefits to your business. We’re going to take a look at a few of the key reasons why contingent workers are rapidly becoming part of the core workforce for many companies.
Before we get to that, let’s quickly look at what the contingent workforce is.
What is the contingent workforce?
The contingent workforce is a category of non-employee workers who provide work for a company on a non-permanent basis. It’s made up of a range of workers, from independent contractors, freelancers, gig workers, consultants, contract workers and temporary workers (temps).
Each of these contingent workers only work for a company on a temporary basis, whether it be for a specific project or for a predetermined period of time. Once that deliverable is completed they leave the company and look for new work.
Contingent workers are not employees of a company that they provide services for, and as such they are not on the company’s payroll, not entitled to the same benefits as traditional workers, and only engaged for a specific period of time or deliverable.
Why is the contingent workforce becoming a part of a company’s core workforce?
While contingent workers do not fall under a company’s employee workforce, they are becoming an important aspect of the overall workforce for many businesses. There are a number of reasons for this.
Here a few of the main reasons:
✔️ Contingent workers help organizations access expertise and fill skills gaps
With the contingent workforce growing dramatically in recent years, this category of workers is made up of highly-skilled and expert workers who can help businesses fill skills gaps within their permanent workforce.
Looking to contingent workers is a great way to cover any shortcomings within your existing team of employees. Say you bring in a new project, but it requires expertise in an area that your current employees don’t have experience in. It doesn’t make sense to hire a brand-new employee just for one project. The contingent workforce gives you the opportunity to bring in expert skills on a project-by-project basis, as-and-when they are needed.
✔️ Contingent workers allow for greater business agility
Today’s businesses need to be more flexible than ever before. To address issues around workforce shortages, an increase in project-based work and fluctuating demand, organizations are building agile workforces that give them increased business flexibility.
The short-term nature of contingent work is the perfect solution for building an agile workforce. Organizations can use contingent workers to adapt to a sudden influx of work or access specialized expertise for when a specialized project comes in.
✔️ Contingent workers are a more cost-effective way to achieve workforce objectives
The use of contingent workers makes a lot of sense financially for a wide range of companies, both big and small. In a contingent work agreement your business only pays the worker for the contracted agreement. That means you pay them a specific amount based on a predetermined number of hours or a specific project. Once it’s fulfilled, they leave your organization.
That means you can avoid all of the expensive fees associated with traditional employees, such as benefits, insurance, paid leave, retirement contribution and expensive hiring processes.
✔️ Contingent workers provide faster hiring times
Hiring employees is an incredibly time-consuming and expensive process. Searching for talent, interviewing candidates, sending out job offers and onboarding new hires is a complicated process that makes it difficult for you to achieve your workforce objectives when required.
Utilizing contingent workers speeds up the entire process of fulfilling your workforce requirements. In fact, contingent workers are typically available at short notice, so you can hire them when you need them.
Do you want to learn more about why contingent workers are part of a company’s core program? Get in touch with Conexis VMS today. Our team of specialists would love to answer any questions that you may have and show you how our innovative vendor management system can help you implement an effective contingent workforce management program.