The contingent workforce has grown exponentially in recent years, but while it may seem like the term refers to a specific worker it’s actually far more complicated than that. In this article we look at what is a Contingent Worker, and the different classifications of Contingent Workers.
Understanding the different types of contingent workers available to your business will help to enhance how you procure workers from this workforce moving forward.
The contingent workforce is a group of workers who are hired by your organization under a contract or temporary basis. These workers are typically hired to work until the completion of a distinct project or for a specifically-stated period of time.
In its simplest definition, a contingent worker comes into your company, completes a job or works for a specific period of time, gets paid and then moves onto a new job with a different business.
The contingent workforce is made up from a wide range of workers that are classed as ‘non-employee workers’. These workers include independent contractors, freelancers, independent consultants, and temporary workers.
The use of this workforce has boomed in recent years due to its ability to provide organizations with increased agility, non- core hot skills, lower workforce costs, flexibility and a huge number of further benefits.
The type of contingent worker that you source will depend on your business's unique staffing requirements. While the umbrella term contingent workforce covers all non-employee workers, each individual type of contingent worker is procured, and works in, entirely different ways.
Temporary workers are typically employed through a staffing agency, and are placed in your organization by the vendor to fill a specific staffing requirement you have. They typically work at your company for a specific period of time, which could range anywhere from a couple of days to a couple of months. Temps are generally used by companies to meet seasonal demands, fill temporary positions or to scale up and down rapidly.
Unlike temporary workers, independent contractors are self-employed and are not represented by a staffing agency. The term independent contractor is also an umbrella term for other types of worker. An independent contractor could be a freelancer, a consultant who is an expert in their field or a gig worker. The most important aspect is that all these workers are independent, as in they are not represented or employed by a staffing agency. Since they are self-employed, independent contractors can work from where they want and in whatever time they want without interference from their hiring company. They are usually hired and paid to perform a defined set of deliverables and deadlines.
For businesses, it’s crucial for compliance reasons that when sourcing independent contractors that they are incorporated entities and meet the criteria of an independent contractor within the local jurisdictions in which they are hired. Most jurisdictions will have a test online, which will help companies to determine whether a worker falls under the employee or independent contractor category.
The main categories of contingent workers include:
Freelancers – Independent professionals who take on project-based work.
Contractors – Workers hired under a contract for a fixed period.
Gig workers – On-demand workers hired through platforms such as Uber, TaskRabbit, or Upwork.
Temporary employees – Short-term hires often sourced through staffing agencies.
These workers are not considered traditional employees, as they do not have a direct employment relationship with the company. Instead, they are hired on a project-by-project basis or as needed, and they are not entitled to the same benefits and protections as traditional employees.
Each type of worker offers different benefits and challenges, making it essential for companies to tailor their contingent workforce management strategy accordingly.
When building a contingent workforce within your company, compliance is a crucial aspect to consider. Contingent workers are not employees, and it’s important to understand that to ensure your business achieves hiring compliance in the region that you are operating.
The main differences between all of these contingent workers and your employees include:
To effectively manage your contingent workforce, and ensure that you reduce costs, improve efficiencies, access the best non-employee workers and work with the best vendors for your specific needs, it’s important to manage the process with a vendor management system (VMS).
Manual processes and spreadsheets make contingent workforce programs inefficient and risky. A modern Vendor Management System (VMS) like Conexis VMS helps businesses:
Gain visibility and control over all contingent labor.
Standardize processes across staffing agencies.
Ensure compliance with labor and tax regulations.
Reduce costs while improving scalability.
Conexis is an award-winning Vendor Management System built for organizations that want the power of enterprise software without the complexity or cost. Built on the latest technology, Conexis delivers the expertise, reliability and security of enterprise systems, while offering the flexibility, user friendliness and tailored, personal service you require. Learn more about our Company and why organizations Choose Conexis VMS.
Conexis VMS is purpose-built for organizations seeking to manage their contingent labor spend effectively. Here’s why we're the right choice:
Whether you are looking to Switch your VMS, or just Getting Started, we are here to help. Contact Us for a Free No-Obligation Consultation, See how Easy Conexis is to use by taking a quick 2 minute Self-Guided Online Demo, or Book a Personal Demo Today!
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