Understanding the Contingent Labor Workforce
Whether they go by freelancers, gig economists, contractors or any other title, these workers all represent the contingent labor workforce that is sweeping the world. In America, these workers make up nearly half of the country’s labor already!
As people professionals, this is likely not a surprise to you. Yet, just having the awareness of the changing workforce is far from enough. To make the correct hiring decisions, you need to understand the burgeoning market and how to make it work for you.
What is a Contingent Labor Workforce?
A contingent labor workforce is at the forefront of the future of work. A contingent workforce provides a business with an on-demand team of industry gig economists, providing organizations with a labor pool instead of traditional full-time workers.
Deloitte LLP’s US Human Capital Leader Erica Volini called the future of work the single biggest challenge from a human capital standpoint. Along with automation, the new workforce is proving to be quite an exciting puzzle for numerous people professionals. Volini explained:
And once you create those new tasks, what type of people you need to execute those tasks? What skills and competencies do they need? How should they be structured? How should they be rewarded? How should their performance be managed? How could you leverage new talent models like contracts, the gig economy, and the Cloud? So, it really starts to change and challenge all fundamentals of the way HR has set things up because now we are looking at all those things through a new lens, the future of the way work is getting done, so it’s incredibly exciting.
In 2015, 40% of the U.S. workforce was contingent labor, and that number should only continue to rise with advancements in tech and accessibility. This rise in a new work arrangement provides a series of benefits including decreased administrative costs and payouts associated with social security, healthcare, unemployment contributions and other full-time employee expenses. More so, a skilled contingent labor pool gives your company the on-demand experts you need. Instead of paying dearly for a full-time worker, or hoping another employee can meet the task’s demand, you can hire the expert when you need, as needed.
Contingent Labor: On the Rise
The rise of the contingent labor workforce is thanks to improved technology and bottom line benefits for companies, as mentioned above. The financial gains can be especially beneficial to small and midsize organizations. Forecasting cash flow can be difficult while scaling your business. By cutting down on full-time workers, your company can manage its payroll more efficiently and as needed.
This arrangement provides mutually beneficial gains as well. In addition to the company’s benefits, the employee is afforded the career flexibility that drives many to enter the gig economy. Now, the company can gain a reputation as a destination for contingent laborers and can recruit the top on-demand talent in the market. Just be sure you don’t wait too long to make an offer (more on that below).
Despite the hiring trend appearing to last, the contingent labor does have its shortcomings. Workers often cite a lack of benefits that cloud their healthcare and retirement prospects. Meanwhile, some roles have even been contested in court, arguing that the duties performed were actually that of a full-time worker.
These hurdles are not likely to end contingent labor hiring anytime soon. Companies benefit from a competitive, on-demand workforce and laborers enjoying their career flexibility. With selling points like these, the trend could become a mainstay for countless industries. While the drawbacks should be addressed, the overall concept makes sense for all parties and is gaining in popularity because of it.
Making the Right Contingent Labor Decisions
Anyone can participate in the contingent labor market. However, to make it truly work for your business, it takes proper planning and strategizing — just like any other task.
First, it is essential that your hiring be strategic. Determine the right skills, and also personality, that fits the job. Even if this person is only here for a short time, they need to align with the company culture. Without searching and vetting candidates thoroughly, you run the risk of losing any saved income from your hiring strategy. When using Peoplzz’s marketplace, you’ll have an advantage by seeing all their applicable work in one destination.
Go one step further and always be promoting. Leverage social media and the Peoplzz community to let your audience know about your company. Make them want to work for your company by displaying the work and culture your organization puts out. Remember, when using social media you’ll need to be more precise with your targeting. With the recent news from Facebook, this could further hinder your chance for exposure. Thankfully, with Peoplzz you’ll have a dedicated platform the people and human resources professionals in your community.
Lastly, when it’s time to hire someone, don’t drag your feet. Instead, decide before another company forces your hand. When dealing with top caliber contingent laborers, you need to remember that they are just as sought after as your company is. If you find the person that fits the bill, make them an offer before it is too late.
Today, the workforce continues to change. The contingent labor pool continues to gain presence in the American workforce and beyond. If you are ready to begin hiring on-demand, follow the steps above to ensure that you keep costs low and productivity high. With an adequate amount of productivity, making the right decisions should be second nature to any skilled people professional.
