Contingent Workforce Pros and Cons - Part 1

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The contingent workforce is made up of temporary workers, part-timers, interns, consultants, contractors and outsourced workers. And make no mistake, it’s growing.

Photo by Michael Coghlan, Flickr

According to the 2014 Global Analysis of the Contingent Workforce Index (CWI), “the United States and Canada stand out for having substantially large contingent workforces for the region [the Americas], at more than nine million people and 2.5 million people respectively…” Some estimates expect the growth to continue and predict as many as 64.9 million in the contingent workforce in the United States by 2020.[1]

What does this trend mean for your organization and should you embrace an ever-increasing proportion of non-permanent employees as part of your growth strategy?

To help you decide, we’ve compiled this list of advantages associated with the contingent workforce (disadvantages will be forthcoming in Part 2).

Advantages of Contingent Workers

Responsiveness and agility: when workloads spike unexpectedly or employee absences leave you in a bind, contingent workers can often step in on short notice, enabling you to respond quickly to unplanned fluctuations.

Flexibility: The combination of temporary, part-time and contract work with flexible work arrangements and the opportunity to work remotely allows employers to stay current with the changing needs of today’s work force. From job entrants to those nearing retirement, employees are looking for flexible options that enable them to work on different terms. Incorporating a variety of employment models makes an employer more attractive. 

Cost and time savings: tapping into the contingent workforce can often save both time and money, especially when it comes to short-term hiring needs. Maintaining a relationship with a contract worker who can come in as needed can reduce recruiting costs as well as certain expenses associated with adding a permanent employee. The contingent workforce can also makes it easier to match a company’s employed workforce with its need for labor. This can be especially cost effective in organizations that experience seasonal fluctuations or significant lulls between projects. If a staffing agency is used, costs associated with bad hires are also reduced as the agency invests the upfront recruiting and selections costs and takes responsibility when one of their temporary placements doesn’t work out.

Extended evaluation period: Bringing in a contractor or temporary employee can offer an employer the option of assessing performance over a period of time and across a variety of projects and tasks before making a permanent hiring decision. Sometimes, working outside the constraints of a rigid job description can also help clarify exactly what role is needed.

Access to expertise: The contingent workforce offers employers immediate access to an external roster of people with specific expertise that they may not have (or be able to afford) internally. Cited in an article by Patricia Schaefer, Joe Broschak, Assistant Professor of Organizational Behavior at the University of Illinois commented that both the quantity and quality of “free agents” are on the rise giving employers access to a growing pool of highly qualified talent available for temporary assignments. 

Global Reach and Diversity: The contingent workforce is global. Many temporary and contract positions can be filled by remote workers. In tight talent markets, this greatly expands and diversifies an employer’s global reach and candidate pool.

Opportunity for alliances: In today’s competition for skilled and knowledgable talent, the relationship between a contingent worker and an employer can become more of an alliance that spans time and geography. Rather than being used as a tactic to push people into sub-optimal employment situations; temporary, contract and part-time positions can be offered to those who value flexibility and autonomy over traditional employment options.

When shifts in the global workforce become trends, and those trends continue to gain momentum, it’s imperative that employers consider how they will respond. The growth of the contingent workforce is one such trend. How will you respond?

Watch for the flipside of this discussion in Contingent Workforce Pros and Cons - Part 2


Whatever the role, create an exceptional candidate experience with NetSuite TribeHR. Start your free trial today!

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