Do You Need a Contingent Workforce?

In 2022, the Great Resignation is dragging on, leaving many employers without enough staff to meet the needs of their market.

Contingent workforce

The reasons for the Great Resignation are many and complex; they center on the effects of the COVID pandemic, which has shown employees that they can be productive at home and that their current employers are not able to provide the pay and perks they need for a healthy and satisfying life and career.

However, many employers are not structured to meet steep demands of departing employees. Small businesses in particular cannot increase every employee’s salary by a significant degree, and offering progressive perks such as daycare or extended PTO will make them less competitive and prone to failure. Thus, many businesses simply have to watch as their workforce disappears.

As a result, many businesses are searching in desperation for solutions to their labor shortage — and many are turning to the contingent workforce.

What Is the Contingent Workforce?

The contingent workforce is well known in the business space — but many business leaders might recognize it by a different name: temporary workers, or temps. All contingent workers remain with a business for a brief period of time, often on a project basis, but different types of contingent workers come to the business in different ways.

For example, all of the following types of workers are part of the contingent workforce:

  • Freelancer. These workers are technically self-employed, but businesses can utilize their services. Freelancers choose their projects and set their pay.
  • Independent consultant. Consultants can provide much-needed knowledge or skill in particularly challenging business fields.
  • Contractor. Typically employed by a staffing agency or some other business, contractors can provide a range of services. Businesses pay contractors’ employers, who pay the contractors in turn.
  • Seasonal worker. Seasonal workers fulfill seasonally high demand for labor, like retail workers during the winter holidays.
  • Part-time worker. Because part-time workers are considered non-permanent workers, they are part of the contingent workforce. However, part-timers can leave the contingent workforce by earning full-time positions.
  • On-call worker. Being available for work on an on-call basis is considered an alternative work arrangement that fits into the contingent workforce.

Are There Benefits to a Contingent Workforce?

The contingent workforce would not exist if businesses did not benefit from temporary workers in some way. Most businesses operating today use a mix of contingent and non-contingent workers, which allows them to balance costs, talent and labor to remain productive and profitable. Some of the biggest benefits to utilizing a contingent workforce include:

  • Access to top talent. Many businesses cannot afford to hire the most experienced professionals full-time, but they can take advantage of expert knowledge and skill on a short-term basis.
  • Flexibility. While employees are difficult and expensive to hire and let go, the contingent workforce is quick and easy to adjust, giving businesses minute control over their labor needs.
  • Lower costs. It is substantially cheaper for companies to use contingent workers, as contingent workers do not cost a business taxes or benefits and they usually demand lower wages.

How Do Businesses Manage the Contingent Workforce?

Businesses can rely on the contingent workforce to bridge the gap left by the Great Resignation — but they need a strong strategy for keeping all their contingent workers organized and on task.

Though it might be tempting to allow contingent workers to skip the HR cycle and dive straight into their temporary responsibilities, businesses should develop a system for onboarding to ensure contingent workers can get up to speed as quickly as possible. Then, to track performance and compliance of the contingent workforce, businesses can take advantage of contingent workforce management solutions.

Is the Contingent Workforce the Best Solution to the Great Resignation?

The best way for a business to survive the Great Resignation is to have a strong, reliable company culture that makes its employees feel appreciated and maintain their loyalty to the brand. Business leaders who neglected their company culture prior to the Great Resignation can fix it moving forward — and in the meantime, they can lean on the contingent workforce to get them through these tough times.

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