to recent financial turbulence, businesses have needed to operate with a more
agile workforce, ramping up and down to meet the ever changing market
demand. A contingent workforce provides flexibility, an increase of efficiency and adds to cost control, but
management is key.
So, what is a “contingent workforce”? It most commonly
refers to the external workforce which consists of temporary labour from
staffing agencies, self-employed or independent contractors and outsourced work
to external companies. The make-up of a business’s contingent workforce can
change and be different dependant on industry, business type, time of year, and
a range of other factors. A contingent workforce is usually made up of four categories:
1. Employment Agency Workers:
These are non-payroll workers that are hired on a temporary
basis through an employment or staffing agency. These are most likely to be specialist
consultants or temporary labour that is
needed by the business but not as full-time employees.
2. Independent Contractors:
are similar to employment agency workers but these tend to be self-employed
consultants that are sourced and managed by the end client.
Freelancer is a single worker that is sourced to complete
one piece of specific work (i.e. designing a new logo). These workers are
becoming more popular within the contingent workforce, fuelled by online
marketplaces like ‘Upwork’.
4. Service Providers:
This is usually
a specific project or function within a business, that is outsourced to a
service provider to complete or manage. Service Providers will deliver the project or function via a Statement of Work
(SOW) and can be sourced directly by the initial
firm or via a third-party e.g. employment agency.
Using a contingent workforce provides a range of benefits
such as reducing costs and increasing flexibility; however, the benefits
provided can often be at a trade-off with an increased level of risk. Risks generally arise due to the
fluid nature of this type of workforce in that they are constantly evolving, resulting
in increased attention globally from lawmakers.
This is where Managed Service Program, or MSP, providers
such as Volt Consulting Group can add
value. We make sure your contingent workforce is compliant and being managed
effectively to maximise the benefits this workforce can bring to a business,
implementing agile solutions that meet the demands of the market and law makers.
As shown in the diagram from SAP Fieldglass (External Workforce Insights 2018), the contingent workforce can
and should be a core strategic initiative for any business to achieve its goals.
If you would like to further your understanding of this workforce and find out how
it can be managed effectively, please contact Shawn Jones (firstname.lastname@example.org )
or Will Dennis (email@example.com).