Why Should My Organization Use a Contingent Workforce?
One thing is certain in these uncertain times, and that is the fact that change is happening, whether we are ready for it or not. The pandemic forced many businesses to take another look at their business priorities and readjust as needed. One trend that was already growing was in talent procurement and the emphasis on engaging with more contingent workers to meet the changing demands of the business. Intuit reported that 80% of organizations plan to increase their reliance on flexible workers like gig workers and contingent workers over the coming years. ADP reports that one in six workers within an organization are already contingent workers, a lot of which is unaccounted for in business spending and forecasting. All of these just go to show how prolific this way of procuring talent has become, both from the organizations and the worker’s point of view.
Why Contingent Workers (Gig Workers)? The chicken or the egg. Which came first? But what does this age-old question have to do with the move towards contingent work? Who knows which came first - high-demand talent opting into freelancing, or organizations recruiting and tapping into the knowledge of this high-demand talent on an as-needed basis. Regardless one thing is clear. High-demand talent is choosing to move to a freelance role for several reasons; flexibility, work-life balance, and economic reasons. Covid accelerated the already quickly changing workforce. It seems natural that if a highly skilled worker is choosing to offer their services on demand and to multiple organizations, then it makes sense as a business to work with that individual in the way that they prefer. Besides the fact that the workers are largely choosing to work in a contingent role, there are other benefits to the business looking to tap into the contingent workforce.
- Contingent workers require less onboarding. This not only saves you time...but also money. SHRM says the average cost to onboard a new employee is around $4000 per employee. Contingent workers don’t need the same level of HR involvement (if at all) to introduce them to the organization since their tenure is expected to be short-term.
- Contingent workers give businesses more for their money by requiring less time to complete projects and producing high-quality work. Contingent workers also enable businesses to reach otherwise unreachable markets without having to go through the process of recruiting and hiring a full-time employee and setting up a physical office in the outside location.
- Contingent workers provide more flexibility and agility. As they are temporarily with you for the completion of a certain project, they can supplement your current team members with a skill that you may not have in house at the moment and fill the talent gaps within your organization. They can help you meet a specific need quickly, sometimes within days, and keep your project moving forward. They can also work outside your typical business hours, allowing you to meet a wider variety of customer needs.
- Contingent workers offer new perspectives. We’ve all been there - after a while of working on the same thing day in and day out, we get stuck in a hamster wheel and it can be hard to see outside of it. Contingent workers have not been inside your business day in and day out - so they can easily see gaps where you may have missed or provide new insight into your current plans.
- Another benefit of contingent workers is they have developed the skills necessary to be the most productive they can be with the hours they have available. It is in their best interest to get the job done faster so 1. They can get paid and 2. They can move onto their next project. Because they are highly motivated and self-sufficient, with the right contractor, you can be confident that there will be a timely finish to your project. And if for whatever reason, it does not go as planned, if you have a freelance management system to keep track of your contractors, you can easily notate that internally within the software so you can adjust your expectations for the next project.
Research conducted prior to the COVID-19 pandemic found that 60% of all contingent labor is unaccounted for in financial planning, forecasting, and budgeting according to CPO Rising. Can you imagine? Over half of contingent labor is unaccounted for. One of the main reasons for this is the ineffective means that most organizations use to manage their contingent workforce that requires manual spreadsheets, e-mails, documents, storage space, and multiple personnel to organize, vet, rate, and pay your workforce. If you are tired of the swivel chair, find out how a freelance management system can give you a full picture of your workforce and give you the most out of your freelancers.