The Contingent Workforce – What is it?

Due 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: 

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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:

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.

3. Freelancers:

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 ( ) or Will Dennis (

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