Contingent Workforce Strategy: Getting It Right

You’ve likely heard of the gig economy a lot recently. These are otherwise known as contingent workers and they’re filling key roles in an array of industries. A contingent workforce brings flexibility and can save on cost, but it can also have its challenges.

Where can you find the right talent? How do you manage non-traditional employees? What are the compliance laws to be mindful of? Get it right and a contingent workforce can be a major strategic advantage. Get it wrong, and it becomes a liability.

What Is a Contingent Workforce? Defining Contingent Workers and Contingent Work

A contingent workforce consists of talent who serve an organization only when they’re needed. As such, they complete temporary or short-term jobs with a limited tenure. Examples include:

• Seasonal workers
• Temporary fill-ins
• Independent contractors
• Freelancers

In the US, contingent workers make up. In some industries, these numbers are upwards of 40-50%. It’s a growing trend. Ongoing skills gaps, early retirement, and market trends are all contributing. According to if you’re not utilizing contingent workers, you may be at risk of losing the war for talent.

There are various reasons why companies opt for this employment route. A contingent workforce offers flexibility. Employers call them in only when there is work for them, reducing costs from underutilized permanent staff. It’s a way to bridge your skills gap. You get access to a broader talent pool. Contingent workers often have niche skills that are particularly relevant to a certain project. The overarching benefit is that employers can save on costs without long-term commitments.

Managing a Contingent Workforce: Benefits & Risks

While there are benefits, there are also risks involved if employers don’t manage their contingent workforce correctly.

A contingent workforce requires a separate management approach. Often these workers are remote or at least hybrid. They have the potential to pose. They’re typically outsourced, adding to HR and management responsibilities. It’s important to work with recruitment agencies to track and engage with your contingent workforce.

While the flexibility and temporary nature of gig workers are major benefits, it also means that they may never really be “part of the team.” A contingent workforce may never integrate into your company culture. Their short-term commitment could also discourage loyalty or passion.

Another consideration is compliance. There’s a risk of misclassifying contingent workers which could result in the wrong compensation package and, consequently, legal issues.

Best Practices for a Contingent Workforce

To get the most out of your contingent workforce, we’ve curated a list of best practices to follow.

• Invest in talent acquisition and management software.
• Define roles, expectations, and timelines clearly in a contract or statement of work.
• Classify contingent workers based on updated employment laws to ensure the right compensation and benefits.
• Provide necessary onboarding and training to integrate contingent workers.
• Make your contingent workforce feel part of the team by including them in communications.
• Monitor their performance and satisfaction through observations and feedback.
• Work closely with the third party or agency that you found them through.
• Take the necessary steps to keep company files private and reduce security risks.

Developing an Effective Contingent Workforce Strategy: Tips for Success

As an employer utilizing a contingent workforce, you’ll need an effective strategy.

1. Start by determining your needs. What roles in your organization could you outsource? Look closely at short-term roles, special or niche expertise requirements, or departments with skills gaps. Consider industry trends and technology advancements to stay ahead of your competition.
2. Next, find the right partners to work with. Staffing agencies, freelance marketplaces, and independent contractors are all useful resources. Look for those who specialize in your industry and/or the roles you’re filling. They will find qualified, top candidates for you.
3. Once you find contingent workers – don’t neglect them! Just because they’re temporary, doesn’t mean they don’t need the proper onboarding and training process. The more you invest early on, the better integrated and dedicated to your organization’s mission they’ll be.
   
4. Keep track of your contingent workforce. Monitor their performance and ensure they have what they need to complete their job. Liaise with full-time employees about the collaboration so nobody feels burdened. Ask and offer feedback to optimize the arrangement.

Final Comments

Effectively utilizing a contingent workforce could give you a competitive advantage in your industry. The war for talent and lingering skills shortages continue to cause problems for employers. It’s useful to remain agile and make alternative employment decisions. If outsourcing temporary talent can help you have that edge, it’s time to develop a thorough contingent workforce strategy.