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What is a Contingent Worker? Everything You Need to Know

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nSider (Edition 8)

Defining Contingent Workers

Staffing Industry Analysts (SIA) define Contingent Work as 

“work arrangements that differ from regular/permanent, direct wage and salary employment. Contingent work and workers are primarily distinguished by having an explicitly defined or limited tenure…”

Contingent workers are people who a company engages for a fixed period. Such workers can have either long-term or short-term contracts. A contingent worker can be an independent consultant, freelancer, contractor, part-timer, or someone who’s in an alternative working arrangement. 

With almost 47 million workers in the US quitting their jobs, the Great Resignation has become a reality exacerbated by the global pandemic. However, it’s not only the pandemic that caused it. Workers (primarily millennials) are searching for more freedom, autonomy, flexibility, and work-life balance.  Contingent and remote work is a pathway towards that goal. 

The State of Contingent Workforce Management report from Ardent Partners demonstrates that 62% of businesses consider contingent workers an essential component of their workforce. An Intuit report indicates that most US corporations are planning to increase the number of contingent workers in the company, making them over 40% of the total workforce. Given the precarity and uncertainty of our times, more and more organizations are shifting to hybrid and remote work with several contingent workers. It’s estimated that contingent workers will represent 50% of the US workforce by 2050. 

 

Difference between employees and contingent workers

The significant difference between a contingent worker and an employee is the roles they’re assigned to. An employee handles day-to-day business operations while a contingent worker is hired for a specific time period to perform a specialized task. 

Arthur Ransier, Business Strategy Director at nTech Workforce, explains, 

“Contingent workers engaged through a staffing agency or other intermediary are governed by a work order or job assignment and co-employed by the staffing agency and an end client.” 

Employees are mostly engaged in full-time work governed by an employment contract which provides a company with a higher level of control over the employee’s work.

 

Advantages of hiring contingent workers

“There are myriad benefits to hiring contingent workers which depend on the channel/service – staffing agencies, crowdsourcing/open innovation platforms, freelancer marketplaces, business process outsourcing partners, gig marketplaces, etc. – but the underlying benefit to unlocking all sources is accessing the best workers, ” says Ransier. Some of the benefits of hiring contingent workers include: 

  1. Driving Company’s Value - Contingent workers bring a wealth of experience and diversity to the teams. The scalability of the contingent workforce allows for organizations to get to market faster, respond to customers in a more timely manner, and otherwise get work done more efficiently.

  2. Talent acquisition - For top executives, attracting and retaining talent remains their biggest priority. Contingent work is a critical pipeline for the inflow of talent within the organization. The rise of contingent employment is associated with the increasing need for digital skills that might not be available in the same locality or even the same country. Contingent workers can be employed in critical projects that enable organizational flexibility. Such workers also directly impact the employer’s reputation/brand through their varied experiences. Hiring contingent workers gives the company access to high-quality labor for a specific project. 

  3. Higher flexibility - Contingent labor provides more flexibility as the company can hire based on the seasonal demands. They can reassess such needs on an ongoing basis and employ new staff accordingly. “At nTech, a large part of our contingent workforce prefers the flexibility of a limited tenure assignment, particularly taking a few months off upon completion of their project,” adds Ransier. nTech employs a significant number of retirees and those with benefits afforded outside of their employment, such as Veterans or those with a working spouse.

Contingent labor offers numerous benefits to the company and the worker; however, it’s not as simple as it seems. Due to varying labor laws, lack of a proper arrangement between companies and contingent workers, mismanagement, and payroll issues, hiring contingent workers remains challenging for businesses. However, as discussed above, companies must hire contingent workers to meet the demands of increasingly specialized, competitive, and dynamic markets. To help businesses achieve these goals, nTech provides innovative and customized staffing solutions that cater to your business needs. Our solutions are optimized for facilitating employee growth and solving workplace productivity, diversity, and hiring challenges. Our services include direct hire, staff augmentation, LEVEL-UP, direct sourcing, payroll outsourcing, and agency of record (AOR). We’re committed to finding the most desirable people and building a framework that engages contingent workers.