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The Rise of the Contingent Workforce

Posted by Louis Flory

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4/21/15 6:30 AM

One of the biggest phenomena currently impacting companies across most industries is the increase in usage of contingent workers, otherwise known as temps, independent contractors, outsourced labor and the like. The explosion of the contingent workforce has reached a point that has left some analysts predicting that these people will soon become the norm, surpassing full time employees.

For now, however, we can look at this trend as growing in popularity due to the benefits that contingent workers can provide. The numbers bear this out:

  • Reports indicate that around two-thirds of companies in a variety of industries were using contingent workers by late 2012;
  • Almost a quarter of businesses were planning to increase their contingent workforce in 2013;
  • By 2014, temporary workers would make up almost 10% of all employees in the U.S.

Additional details on the contingent personnel boom can help you appreciate that this trend isn’t going away, but can actually help you prepare for the future.

The Contingent Workforce is Here to Stay

  • Not Just Retail Anymore: It used to be the case that contingent workers were needed in the retail industry to respond to seasonal demand. Today, almost every industry – from manufacturing and logistics to accounting and healthcare – can benefit from contingent manpower.
  • The Future is Now: Companies are taking advantage of contingent personnel at a staggering rate. According to an Accenture survey, 20-33% of the American workforce consists of contingent workers.
  • Just In Time Hiring: A quickly changing and constantly evolving market requires businesses to react in a flash to production demands. Bringing on permanent hires isn’t always practical, but contingent workers can be brought in to supplement regular personnel on the fly.
  • The Need for Temporary Pros: No longer are contingent positions being filled only by hourly, non-skilled labor. Professionals from a wide range of skill sets have been retained as C-Level executives, legal staff and accounting experts.

Prepare for the Contingent Workforce

Once you appreciate that contingent manpower is not just a trend but a convincing business model, it’s critical to position your company for success.

  • They’re separate from your permanent employees: You’re hiring and maintaining two groups of workers, so always bear in mind their differences. Unlike your full time workforce, contingent workers are seeking different rewards. Beyond salaries, they want perks like skills training, networking opportunities and flexibility. 
  • A specialized training curriculum is necessary: Contingent workers need to be fully trained on the systems and procedures that they’ll be operating within, but you must develop a unique program to do so. Access and permissions must be limited for security purposes, so proceed with caution when setting up profiles.
  • You’ll need a solid strategy for contingent workers: Probably the most important aspect of contingent help is putting into place a documented approach for hiring and retention. You need to designate proper criteria for new people and establish expectations for performance. It’s also important to encourage your contingent staff to stay with your company, by offering unique perks that respond to their motivations for doing work in the first place.

The rise of the contingent workforce has introduced a business model that will take on new importance in the coming years. Companies are realizing they can’t completely rely on permanent employees in a quickly moving market and that contingent workers can complement their workforce efficiently and seamlessly. Business owners have much to do as far as preparations for the contingent workforce, but establishing a strong process for bringing workers on board will pave the way to success.

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Image Source: Nigel Howe

Topics: Contingent Workforce Management, Workforce Management, Contingent Workers