COVID-19 has drastically changed our social and physical environment, and inherently, the way we do business within it. We have seen extremes in both reductions and increases in staff by business struggling to keep the doors open, and conversely to keep up with demand for “essential” products. With an unprecedented level of uncertainty and need for the ability to scale, many businesses are pivoting to a contingent workforce as increases in staff are required. There are several reasons why contingent counts are on the rise, but first let us look at how we define a “contingent worker.”
What is a Contingent Worker?
Contingent workers are defined as independent contractors, freelancers, consultants, or other outsourced and non-permanent workers who are hired on a per-project or temporary basis. These workers can perform on-site or remotely and are not simply temporary workers. Generally, contingent workers are highly skilled in their fields. Contingent employees can work on a project-to-project basis, but many contract for a trial period with the intention of hiring on as a W2 employee later. This is also known as temp-to-perm employment.
Why would someone want to be a contingent employee?
Not only are businesses taking a hard look at contingent employees, but also this type of work is becoming increasingly popular with workers. Contingent work may offer employees a flexible schedule, the opportunity to learn a new skill, or a chance to get their foot in the door at a company they may not have otherwise. Once working in a company these employees are able to prove themselves a good fit to hire. On the other hand, some employees like to experience what it is like to work at a company before fully committing. In some cases, people look for temporary assignments that correspond with events in life outside of work.
How do businesses find much-needed contingent worker?
Businesses will recruit contingent employees in multiple ways. Some will simply post jobs on their company career page, or other job boards. Generally, they will “1099” those employees and the employee will be responsible for their own tax deductions and insurance. Businesses also utilize recruiting firms. Using a recruiting firm or “staffing agency” offers access to specialized recruiting services. These firms will payroll, insure, and provide benefits to the contingent worker for the length of their assignment. This is good fit for both the employer and the employee. The business has the benefit of a flexible workforce and the employee is offered the benefits they and their families need.
Why are companies increasing their contingent workforce?
Recently businesses are concerned about another potential COVID-19 related shutdown. They need the ability to scale down quickly. Ending an assignment through a staffing agency is much easier than layoffs and furloughs. When those workers are needed back, businesses need to know they can get them back. The ability to scale up is just as important, and many businesses partner with a recruiting firm to ensure that. Over 80% of executives surveyed by Oxford Economics say they are increasingly using contingent employees—non-payroll personnel including intermittent and seasonal employees, consultants, freelancers, and part-timers. This trend is global and cuts across all industries. The contingent workforce offers businesses greater agility, access to talent, and ability to control cost.
Can businesses use any staffing agency?
It is important to research any type of vendor to find the right fit for your business, but it is critical in selecting a staffing agency. Recruiters operate in many different niches with different levels of focus on human resource policy, State and Federal law, safety compliance, etc. To ensure a compliant, productive and beneficial relationship, those values must align with your business. Additionally, if a staffing agency is capable of hiring for all or most aspects of a business, that business can focus attention in other critical areas. Partnering with a recruiter that understands a company’s needs as well as the needs of the contingent worker is key. Alignment between the business, recruiter, and employee results in a mutually beneficial employment experience.
The nature of employment is changing. It is up to business leaders to look to the future and make the changes required to survive some of the most uncertain times we have seen since the great recession. Pivoting to a contingent workforce may provide the flexibility necessary to propel your business into the coming decade.
Employers: Call Vertex Resource Group at 630.377.1001. Vertex is a premier recruiting firm placing employees in direct hire and contract positions nation wide.