What is the contingent workforce?
This article was originally published on Employbridge.com
The Contingent Workforce
COVID forced organizations to quickly adapt to constantly changing market conditions. Nearly three years later, the pace of change hasn’t slowed. To become more agile, companies are turning to contingent workforce staffing. Let’s dive into what contingent staffing is, its significant value for organizations, and how to know if it’s a good option for your organization.
Contingent workforce explained
The contingent workforce is a labor pool that’s hired as needed. These workers contribute specific skills or expertise to a team and for a defined period to boost staffing flexibility and agility. They typically operate with a more fluid work arrangement.
What is a contingent worker?
A contingent worker is a professional who’s been engaged by a company to provide specialized skills, flexibility, and on-demand support without the commitments of permanent employment. Generally, businesses gain access to contingent workers by hiring them directly or through staffing agencies. The most common examples of contingent workers include:
- Consultants: Experts offering specialized advice or services, often operating through a company.
- Freelancers: Professionals who are self-employed.
- Independent contractors: Workers operating through a company providing distinct services or work products.
Industries where contingent workforces are common
While you’ll find temporary labor in virtually every industry, contingent workforces are most notably present in:
- Information technology
- Creative sectors
- Manufacturing and warehousing.
- Financial services
What does the contingent workforce landscape look like today?
As of 2021, Staffing Industry Analysts (SIA) estimated there were 52 million contingent workers in the U.S., making up 35% of the workforce and contributing $1.3 trillion in revenue. What’s more, initial reports in 2022 led the firm to anticipate a further rise in temporary staffing and business expenditure on contingent workers. This global growth trend has been mainly attributed to:
- Market volatility and uncertainty: When faced with fluctuations in demand and economic uncertainty, businesses often turn to a contingent workforce to adapt swiftly to change.
- The need for flexibility and specialized expertise: Companies increasingly want on-demand access to talent with unique knowledge or skills. Contingent workers allow firms to scale resources without the commitment that comes with full-time hires.
- Cost efficiency demands: Leveraging temporary labor generally proves more cost-effective because it reduces the expenses associated with benefits, training, and overhead for full-time employees.
- Evolving work culture: Work preferences are changing among professionals today, with many people valuing the flexibility, autonomy, and diverse work experiences from contingent roles.
The value of contingent workforces in evolving industries
Taking advantage of contingent labor can provide businesses with benefits such as:
Access to a wider pool of talent
Using contingent labor expands a team’s talent horizons by providing specific skills and diverse perspectives needed for projects. Engaging remote contingent talent also unlocks untapped talent markets and opens doors to more opportunities.
Minimized organizational skill gaps
Integrating contingent workers into specialized roles is an effective way to immediately address skill voids. Organizations can gain tailored expertise for tasks and ensure smooth project execution. By effectively addressing short-term skill shortages, teams significantly enhance project efficiency and promote optimized outcomes.
Reduced labor costs
Employers are finding that contingent workforces help to optimize expenses by eliminating costs such as benefit packages and overhead that come with full-time, regular employees.
Faster time to execution
Ready access to talent with the necessary skills for a project can expedite timelines. This not only accelerates service or product delivery, but also boosts organizational competitiveness by helping businesses meet client demands and stay ahead in product development cycles.
Improved productivity and efficiency
Because contingent workers offer specific know-how, they can quickly elevate productivity and efficiency on projects. As a result, teams can expect streamlined processes and higher-quality output.