Learn about contingent workforces, why should you consider them, and how to create one for your business.
Regardless of which industry your company fits into, you will always need help from people outside your organization. That’s where contingent workforces come in handy.
But as many companies across just about every industry continue to deal with the COVID-19 pandemic’s devastating impact on the world, the shape of contingent work is blurrier and more pliable than ever. This is stressful, but it has the potential to be exciting as well.
So if you’re looking to create a contingent workforce for you business but don’t know how to go about putting one together, don’t fret! We’ve put together some handy tips that will help put you on the right track.
But first: just what are contingent workforces and why should you consider them? Why are they so important?
What is a contingent workforce?
A contingent workforce simply refers to a pool of on-demand workers who are not permanent employees of the organization. Usually, companies bring in these contingent workers to complete jobs and offer expertise in ways that aren’t possible internally.
Hiring contingent workers can be beneficial for your company, especially if you need skill sets that your current employees don’t possess. Perhaps the most notable benefit is the potential cost-effectiveness of a contingent worker. Vacation time, overtime, and benefits packages don’t fit into the equation because those are only offered to permanent employees of your company.
At the end of the day, this is basically outsourcing, which is the practice of delegating a specific task or project to individuals or companies outside of your company. The subtle difference is that outsourcing is often a one-and-done gig, while contingent workforces are always available to help when needed.
Are contingent workforces as effective as people say?
That depends. They definitely can be, but very careful planning has to be an integral part of assembling contingent workers. You need to figure out if and how they fit into your 2022 plans, as well as how long it will take to implement one. If a contingent workforce is something you do want to put together, you need to determine if it’s something you can feasibly and financially do now — or if it’s a long-term goal you plan to reach one day. Either way, being intentional when assembling contingent workers is absolutely vital.
If a contingent workforce is something you do want to put together, you need to determine if it’s something you can feasibly and financially do now — or if it’s a long-term goal you plan to reach one day.
Are you classifying your workforce correctly?
All of this leads nicely into the next point. The other thing you need to be mindful of is the legality. Make sure the line between contingent workers and permanent employees is clear to everyone. Don’t assume that the people you are hiring are as aware of the payment and parameters as you are. If they’ve done contingent work before, they know better than anyone that the compensation and demands of every job vary wildly.
Skipping this step or hastily drawing up a contract can land you and your business in some seriously hot water. This way, you avoid the messiness of a contingent workforce intent on bringing you down for inconsistent pay or unfair treatment. You can also avoid full-time employees coming to you with concerns that on-demand, temporary workers are getting better rates than they are.
The bottom line is this: contingent workers can be an enormous asset to you and your company. They bring levels of knowledge and expertise that are worth more than you could pay them if they were full-time, but because they are temporary workers, you aren’t under years-long contracts with them. You can utilize top-tier talent in a way that isn’t shady, underhanded, or deceptive in any way. However, that means it’s up to you to make sure that your expectations and parameters for the job are clearly articulated and accurately documented.
What’s the best scenario for your business?
The ideal set-up would be a scenario where your contingent workforce is so reliable and easy to work with that you can’t imagine parting ways with them professionally. The less-than-ideal set-up would obviously be the opposite: hiring workers who feel slighted and become litigious because you weren’t clear about what the job entailed and how much it paid. Or, along similarly negative lines, you hire a contingent team that you end up hating and that you wouldn’t wish on your worst enemy.
How does hybrid work affect a contingent workforce?
Three years ago, this question was not nearly as important as it is now. But now we’re in the midst of a global pandemic that has altered the way we live and work forever. COVID, The Great Resignation, and a whole host of other factors are changing how people want to work. One of the big changes we are seeing is the pivot to hybrid work models.
Hybrid and remote work are both becoming increasingly popular in our pandemic-stricken society. Hybrid work models involve a mix of remote and onsite work. Because of that, employers and their employees don’t always agree on how many days they should spend at the office versus at home. Obviously, this can significantly impact how you hire contingent workers, what you hire them for, and where you look to find them.
One of the biggest ways hybrid work models affect a contingent workforce is that they force companies to think harder about where they’re sourcing their talent. And that’s a good thing. Are they getting local professionals to come in on designated days and work their magic, or are they looking farther out for the skills they need? Hybrid work models complement that flexibility and give you more options. They make it so that you don’t have to feel married to a particular method of outsourcing, and that the arrangement is understood to be flexible and impermanent.
How do I know if I need a contingent workforce?
This is an important question to ask, and the answer depends on several other considerations:
- How many contingent workers do you want or need to complete jobs?
- What’s your budget?
- If your current budget won’t cover the expected costs, how will you work around that?
- Is your business one that’s able to hire remote workers easily, or does the brick-and-mortar nature of your headquarters make hiring outside your town/city difficult?
These are all questions that are worth answering before making the decision to form one.
If you’ve got the extra dough and want to try out something new, contingent workers are a much safer bet than creating permanent jobs or departments that aren’t necessary or sustainable.
Contingent workers can also be useful for companies in “experimental” stages. When we say “experiments,” we mean projects that require skill sets that aren’t normally needed at your company and that likely won’t be needed very often. If you’ve got the extra dough and want to try out something new, contingent workers are a much safer bet than creating permanent jobs or departments that aren’t necessary or sustainable.
As we all prepare to leave 2021 behind, what are your goals for your business? How will a contingent workforce get you closer to where you want to be? What kinds of steps do you need to take now to make this implementation easier and more affordable? Consider these questions and start looking at ways you and your company can grow. Contingent work can be an excellent arrangement for all involved, as long as transparency is prioritized. Do that and you can expand your talent pool in ways you might not have thought possible.