HR Takes Notice of Contingent Workers

Contingent Work is on the Rise & Companies are Taking Notice

There has been an undeniable shift towards the use of a flexible workforce and for many reasons. Workers are demanding it, contingent workers are highly specialized talent and provide very specific services for an organization. And not only that, but they cost less than a traditional worker, require less onboarding, are highly sought after, and much more. Regardless of the reason, 80% of firms across the globe are increasingly tapping into the skills of the contingent workforce according to recent research by Gartner.

Currently, contingent workers are procured by the individual department requiring their services, but the inconsistent messaging and hiring brand reputation can suffer when the process of bringing in new talent is not centralized. While contingent workers do not expect the same type of relationship as an employer/employee nor the same type of benefits, they do want to work with organizations that have a strong culture and they do consider employer brand when choosing companies to work with. It can be difficult to recruit and retain contingent workers if their experiences do not meet their expectations.

As a result, HR departments are starting to take notice of what has traditionally been a departmental task and looking to work with the various teams to provide a centralized approach to bringing contingent workers onboard. For Royal Phillips, a global healthcare firm, this meant that HR took over leading the contingent workforce program and partnered with internal recruiting teams as well as outside firms who provide the contingent workers, developing a more personal and tailored approach to finding qualified contingent workers.

Contingent Workforce Management Systems Reduce Complexity

One of the reasons contingent workers are so sought after is because of agility. Bringing a worker in to complete a specific task and/or project based on their skill set and expertise significantly reduces the amount of time it takes to get to the finish line. Adding another line of business department into the mix can potentially slow the process down of bringing a contingent worker in for the needed project.

But it doesn’t have to, especially if all of the contingent workforce is managed through a single platform. In fact, Aberdeen goes so far as to say that investing in a Freelance Management System is essential for future-proofing their organization.

As you already know, managing a freelance, or contingent workforce is different from managing a traditional W2 workforce. Tax liability, reporting and pay rate is different depending on the type of worker and the agreement you have with the contingent worker. Instead of being paid a flat rate throughout a month, a contingent worker gets paid by the completion of a job or project and tax reporting falls under a 1099-M instead of a W-2. The worker is responsible for the employment taxes generally covered by an organization for a traditional employee. The expenses typically fall under general expenses as opposed to HR expenses, so may not be easily visible to the department that has contracted the worker since it runs through accounts payable. If your business requires the workers to have specific certifications to perform the function they are hired for, ensuring that compliance at scale can be difficult, to say the least.

But technology such as freelance management systems can simplify all of this. Department heads can source new talent to be inserted into the network and provide HR with an intake form with all the information HR might need, such as payment information, credentials, work history and certifications. HR can still maintain the database and administrative information with the freelancer, while the department heads can access the contingent worker when needed, assign and approve the project and send it over to HR or accounting for final processing.

While a lot of this can be managed with a spreadsheet or other “free” tools, it doesn’t really save your organization time (or money, if you think about it) and can be more of a liability than an asset. Freelance management systems can automate much of this process for you, from onboarding to project completion and payment.

Make the Switch to A Contingent Workforce Management Solution

If you want to realize the full benefits of a contingent workforce, it is critical that you have the right technology behind the scenes to help you manage the entire process. WorkMarket’s Freelance Management System, fully backed by ADP, enables you to automate the process of organizing, managing, and paying your contingent workforce. What are you waiting for?