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Workforce Staffing: The Contingent Workforce Numbers Continue to Rise

Posted by Tara Jones

1/12/16 1:46 PM

Some industries have seen their contingent workforce numbers rise considerably over the last several years, while others are just starting to experience growth in this area. The trend is undeniable: Contingent workers are becoming a big part of the workforce for many organizations across the board. The phenomenon is forcing companies to change the way they manage their personnel, leading them to implement workforce staffing solutions and causing them to make other adjustments. Which industries are most impacted by the rise in contingent workers? Who are the people behind these figures? Here are the answers to common questions.

Where is the contingent workforce going?

Recent years have shown rises in several key areas as they relate to the contingent workforce. These numbers are helpful in forecasting future trends:

  • According to the US Government Accountability Office, 40% of workers are currently contingent-based.
  • For the average company using contingent labor, it makes up 18% of the total workforce.
  • By 2020, it’s estimated that number will be up to 40% of a company’s total workforce.
  • Since 2008, the number of contingent workers has doubled.
  • In 2014, there were 53 million Americans working on a contingent basis.
  • In a survey, 83% of executives stated they plan to increase their use of contingent workers –both seasonally and on a continuing basis.

Why is the contingent workforce business model so attractive for companies?

  • Cost Savings: These individuals are retained through a service for which companies pay an hourly rate or flat fee. Businesses don’t have to pay salary, health insurance, benefits, unemployment insurance and other expenses related to hiring a full-time, regular employee.
  • Availability On-Demand: Most workforce staffing solutions allow companies to make a request for a contingent worker and have a qualified candidate on-site, on-demand.
  • Scalability: During certain time periods and seasons, many companies need more manpower to maintain production levels or services; other slower times mean fewer workers are required. Contingent workers can fill in and be let go as necessary without dealing with layoffs and unemployment issues.
  • Administrative Benefits: Companies with HR departments have fewer burdens with administrative tasks related to contingent workers as the agency handles payroll, taxes and other employment factors.

Which industries are incorporating the largest number of contingent workers?

Oxford Economics recently published a study on workforce trends, Workforce 2020. The report ranked the industries by percentage of companies in each sector using contingent labor.

  1. Public Service Agencies = 86%
  2. Retail = 82%
  3. Healthcare = 81%
  4. Professional Services = 81%
  5. Financial Services = 80%

Who are the contingent workers of today?

The demographics of contingent workers demonstrate that we can expect some shifts in the numbers of full time versus contingent workers in coming years: 

  • The average contingent worker is 46, while W-2 employees are 41 years of age.
  • Just 2% of regular employees are 65 or older; 8% of contingent laborers are 65+.
  • Men outnumber women in the contingent workforce.
  • Educational levels of contingent workers closely parallel those of full time employees.

If you haven’t already been affected by the rise in the contingent workforce, chances are you will be in the coming years. Almost without exception, every industry will feel the impact of the contingent workforce business model. It is smart to be prepared for it.

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Topics: Workforce Management, Contingent Workers