Everything You Ever Wanted To Know About Contingent Workers

With changes in the modern workforce companies, both small and large, need to improve their understanding of the kinds of labor on offer. Contingent workers are a type of worker that has become increasingly prevalent with the advent of the gig economy. Typically, they are not official employees of a firm, but rather contractors or freelancers who provide their services on request. In the past, companies used contingent workers, like accountants and consultants, to provide services that they needed on an on-demand basis. Importantly, these “contingent workers” had other clients and operated much like a business in their own right. But today’s contingent workers often only have one “client,” and to a layperson, probably wouldn’t be considered a business at all.

Contingent Worker Employment Conditions

Contingent employees don’t benefit from the same perks as contractual employees, and they are not considered employees under the law. Contingent workers can be dismissed at any time, regardless other whether they have conducted themselves according to the rules of the company or not, and do not have any of the usual common law labor rights from which the formal workforce benefits.

The Advantages Of Contingent Workers For Business

The perks of contingent workers are considerable. Perhaps the greatest perk for companies is the ability to take on new staff as and when they need them. Seasonal companies, like those in the retail sector, can quickly increase their labor supply without having to continue to pay wages when demand falls back down.

Many companies also use contingent labor to seek out talent before hiring full time. A freelance engineer, for instance, may be exceptionally talented and could potentially provide a firm with exceptional services for many years to come. By offering contingent work, companies can explore relationships without any commitment and then offer highly talented freelancers the opportunity to join on a full-time employee basis if they prove their worth.

Current Trends In The Contingent Worker Labor Force

Both the Bureau of Labor Statistics and HireRight’s 2011 Employment Screening Bench-marking Report show that the number of contingent workers in the labor force has increased dramatically. But the data also show that firms aren’t currently doing enough to screen the contingent workers that they take on adequately. Seventeen percent do not perform any kind of criminal record check, 41 percent do not check the identity of the contingent worker, 55 percent do not check the employment history, and more than 63 percent don’t review an employee’s educational background. The law, however, says that companies must check that contingent workers are legally eligible to work, even if they are not full-time employees of the firm.

How The Contingent Workforce Benefits Employers

Despite a lack of compliance by some firms, companies are likely to continue to hire contingent workers. A contingent workforce, for instance, can protect the firm’s core team in the event of an economic downturn, allowing a company to retain it’s essential human capital while shedding workers that only provide ancillary benefits. Companies also benefit from contingent workers through lower costs. It just doesn’t cost as much administratively or in terms of benefits, to hire a worker on a contingent basis as it does as a full employee. Firms can hire the people they need for the life of a project and then relinquish the additional labor cost once the project is completed.