Contingent Workforce – Everything You Need To Know

March 03, 2020

What is a contingent workforce? Contingent workers are not considered employees of a company. Instead, they work under a contract or on a temporary basis. Unlike permanent employees, their retention depends on the continued existence of the job at hand. If a company has a specific job that needs to be done now but will not be necessary for the future, the company is not stuck with an employee whose skills will not be needed over the long term. The contingent worker comes into the company, gets the job done, gets paid and moves onto the next job. It’s a win-win situation for both the contingent worker and the employer.

What are the benefits of hiring a contingent workforce?

The main reason why employers want a contingent worker or workforce is that it allows them to expand their labor force without accruing more costs for things like health insurance and other employee benefits. Another major benefit of hiring a contingent workforce is flexibility. With a contingent workforce, you can asses company needs on an ongoing basis. Whether you need them for a short-term assignment or seasonally during a peak season, the contingent worker can be a great asset to your organization.

Are there cons?

One word: compliance. The difference between a contingent workforce and a traditional one isn’t always clear and classification laws vary in each state and even city. Take all necessary precautions to ensure hiring compliance. Draft a contract that provides a clear, accurate job description, note their exemption status, and outline a pay rate and a time frame. The more detailed you can be, the better.

How to find a contingent worker

Are you still feeling anxious about hiring a contingent worker? Don’t have the time or established department to recruit, onboard, and payroll your contingent staff? That’s where outsourcing your contingent staff HR and hiring needs to a third-party. This is called an Employer of Record. When you outsource these functions you don’t have to worry about ensuring you are meeting compliance and classification standards because the third-party is the expert. An employer of record also ensures that their payroll experts keep your business compliant with the latest tax and withholding requirements. This allows your organization to free up its’ resources to focus on growing the business instead of managing HR by offloading tasks.