In business, flexibility is crucial for survival. Flexibility requires businesses to adapt operational strategies through workforce planning and other methods.
Before, businesses could get by with training internal staff.
However, today’s landscape often leaves little time to react. So, to adjust to these swift changes, contingent hiring has become standard.
Contingent workforce programs boost temporary staff hires. However, there is a limit to what you can achieve without proper management.
In this article, you’ll find everything you need to understand contingent workforce management. So, let’s get started.
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What is a contingent workforce?
The contingent workforce refers to employees that businesses hire for a short term. They are temporary workers available on demand. Businesses use them to fill in skill gaps or complete specific projects.
When hiring contingent workers, you can get a freelancer or an independent contractor. The type of contingent worker you hire usually depends on the project.
Where to hire talent for a contingent workforce
Access to temporary workers comes before contingent workforce management.
You can hire these workers through various platforms. However, you must be sure of the specialized skills you need.
As the need for contingent labor becomes clear to the business, these are some of the places to find them:
Freelance platforms
Platforms like Fiverr or Upwork are great places to find the right talent to grow your workforce. Your business will be responsible for sourcing and vetting each hire. So it takes time and effort to find the right fit.
However, these platforms make it easier to compare prices. This feature ensures you’re not overpaying or underpaying for a service.
Agencies
There are several staffing agencies that connect businesses with contingent workers. Using these agencies usually helps in simplifying the hiring process. They handle the vetting, legal requirements, tax obligations, and salaries of temporary employees.
Contingent workforce solutions
These are like agencies, but they give you access to a larger talent pool. They usually offer better services in certain areas, such as:
- Detailed management process
- Better compliance management
- Improved worker classification
Why should you hire a contingent workforce?
Relying on a contingent workforce has its benefits. However, their impact only becomes noticeable with effective management.
If done right, these are some of the benefits of contingent workforce management:
- To handle demand spikes: Certain businesses operate in industries with unpredictable surges. These surges are often seasonal. So, it makes sense to hire contingent workers during these peak periods.
- Upskill with ease: The necessary skills required to run a business usually evolve. To match this, businesses must upskill their workforce through training. However, a contingent workforce provides instant access to more highly skilled workers.
- Access to global talent: Remote workers are a major boost to the contingent workforce. They allow you to hire individuals from different regions around the world. This means businesses aren’t limited by location when hiring talent.
- Reduce cost: Of course, using a contingent workforce provides significant cost savings. You pay less in salaries, and only pay when you need the service.
- Faster turnaround: Because contingent workers are often specialists, they can boost project delivery. They usually don’t need training to start a project, which saves a lot of time.
10 Ways to manage employees in a contingent workforce
Managing your contingent workforce helps resolve certain challenges that may arise. You can take specific actions to achieve the best results from your contingent workforce, including:
1. Restrict project assignments to one individual
A clear set of tasks and expectations gets the best results from contingent workers. With one individual handling assignments, it’s much easier to inform them of what they need to do next in the project.
Some businesses allow anyone to assign projects to the contingent workforce.
However, this often results in them receiving more tasks than they can handle. Also, this gives room for miscommunication and contradictions.
2. Ensure everything is legal
Legal compliance must always be a priority when running a business. So, when hiring or managing contingent workers, ensure everything is by the book.
This is why your business must have a legal team. They let in on changes to local labor laws and the types of contingent workers your business employs. This minimizes the compliance risks from using gig workers.
You can also draft Non-Disclosure Agreements (NDAs) while developing a compliant business environment. These agreements prevent contingent workers from discussing your operations with outsiders.
For many businesses, NDAs make internal employees feel more comfortable collaborating with freelancers.
3. Negotiate fair rates
Contingent workers allow you to spend less on salaries. However, you still have to pay them well. They reduce costs by eliminating the need for paid leave, health insurance, and rent. However, they still need to cover these costs.
To get a sense of fair pay, you can check what freelancers charge on sites like Fiverr or Upwork. You can also try calculating a rate while considering important factors. These factors include the project’s scope, complexity, taxes, skills, and potential profit.
In the end, finding a cheap contingent workforce is easy. However, you also get low-quality results from them.
4. Pay on time
Contingent workers deliver high-quality tasks while following strict deadlines. This is how they earn your trust.
However, they need you to provide clear instructions and prompt payment. An inability to pay on time doesn’t sit well with most contingent workers.
This is understandable, since many of these individuals rely on these payments to cover their daily expenses. In most cases, contingent workers don’t get a fixed monthly income, so every payment counts.
Once workers confirm that you pay on time, they’ll push to deliver better results. This is also a great way to ensure they are willing to work with you next time you reach out.
5. Use top collaboration tools
As more individuals join the contingent workforce, better collaboration tools become available. For the best results, your business must make use of tools that help in these areas:
- Project assignment and tracking
- Communication
- Talent sourcing
- Payments
- Contract management
6. Help them understand your processes
Many businesses use specific tools and workflows to improve their operations. Your business might be one of them. So, getting contingent workers to understand how these work is crucial.
One option is to organize training for contingent workers. These training sessions will focus on the specific tools they need for the job. You can also pay for access to learning marketplaces to help them upskill.
In the end, this translates to better productivity for your business.
7. Use vendor management systems
Depending on the company’s size, it’s easy to lose track of the contingent workforce. This can make it difficult to manage payments and assign projects when necessary.
A general employee management system gives a clear picture of what talent you have. You’ll know what is at your disposal and where you’ll need to hire more people. With this information, you can cut staff underutilization and unnecessary hires.
8. Be clear in your project requirements
If you want the best results at the right time, you need to put together a great project outline. Highlight everything you need from the project to avoid disagreement.
Most contingent workers charge on a project basis. So, some employers limit the requirements they provide at the start. Then, as the project progresses, they bring in new requirements. This is a trick to get a lower cost for more work.
Most contingent workers will reject additions not defined in the original project scope. They can also end the contract and leave a bad review of your business.
Getting a negative review makes it harder to hire new contingent workers.
9. Don’t alienate them
Your contingent talent may be privy to certain information, depending on business operations. They may hear about company-wide events, seasonal gifts, beneficial tools, and so on.
If you want to get the best out of them, then you should include them in anything you do. Events, access to tools, study resources, and gifts should be available to them. They might not show up for every event, but treating them as part of the team boosts loyalty.
10. Don’t force a 9-5 schedule
Most contingent workers operate independently. It gives them a chance to do what they enjoy while maintaining control of their time.
If you hire a contingent worker, don’t try to force them to work like permanent employees. Demanding 9-to-5 availability or taking away their remote-work flexibility will create a rift.
What to avoid when hiring a contingent workforce?
Using a contingent workforce comes with its fair share of issues. Learning to identify these issues goes a long way. However, managing your contingent workforce usually resolves them:
- Poor project quality: The right management strategies help maintain consistent project quality. You can achieve this through proper pay structure, collaboration, and clear project scope.
- Confidentiality issues: Having workers sign an NDA indicates consequences for sharing business information. This resolves most confidentiality issues.
- Retention issues: Managing contingent workers effectively builds trust. When workers trust your business, they’re more likely to stay loyal for long-term projects.
- Rising operating costs: Business growth often increases the demand for more employees. However, if done too quickly, the costs can overwhelm the business. Using contingent workers helps minimize costs until the revenue stabilizes.
- Upskilling issue: It’s easy to overlook internal employees in favor of contingent workers. However, with an employee management system, you can identify internal skill gaps. This, in turn, helps you determine the right training.
Conclusion
Building a permanent workforce consisting solely of full-time employees has a significant impact. It puts a strain on operating costs, making contract workers a better alternative. With contingent workers, you get specialized skills on demand and help control costs.
Effective contingent workforce management is essential for improving the performance of contingent workers. It also helps improve the way the business manages various aspects, including:
- Global talent engagement
- Workforce performance
- Human capital management
Your contingent workforce must always consist of skilled workers. As a result, you’ll always enjoy enhanced operational efficiency from the business.