Contingent workers are people who work independently and lend their skills to the companies that need them. They’re temporary employees who are hired based on fulfilling the short-term needs of a company with their specific skills and expertise.
Usually, companies are not obligated to train contingent workers and give them the facilities of full-time employees. The company and contingent employees can discuss the terms of their project and can part ways once they have fulfilled the business needs.
How Many Types of Contingent Workers Are There?
Generally, there are four types of contingent workers that companies hire.
Temporary workers: Temporary or temp workers are hired for seasonal projects or as an extra hand in a company when the company is short of staff. Usually, they are placed in a company through a staffing firm for the required time period and can also be referred to as leased employees. Temp workers don’t require special skills. The staffing firm charges a rate to the hiring company to supplement the payroll and taxes of the workers.
Freelancers: Freelancers are self-employed people who offer their services to a business, mainly contractual. Companies aren’t responsible for providing freelancers with company benefits, such as insurance, taxes, and vacation costs. There are plenty of positions for freelancers available, some of which are digital marketers, content creators, and digital marketers.
Consultants: Consultants are another form of freelancers who offer their knowledge and specialized skills to help a company solve issues. Some examples of consultants are legal consultants, marketing consultants, accountants, and HR consultants.
Why Do People Choose to Be Contingent Workers?
While working as a contingent worker has some drawbacks, it also has several perks. One of the biggest perks of being a contingent worker is having the freedom of time, space, and financial freedom.
Contingent workers can work from anywhere, for any length of time they wish, and work for multiple companies simultaneously, making more than full-time employees from various income sources. They may have restrictions if they work for an agency, but that doesn’t overpower the other advantages.
Why Do Companies Choose to Hire Contingent Workers?
Having a contingent worker gives employers a lot of advantages, most of which are financial and legal.
Easier hiring: Hiring a contingent worker is more accessible as it requires fewer recruitment steps, less time and capital, and doesn’t need employee onboarding. Employers don’t need to train contingent workers as well since they’re already experienced in the role.
Flexible operation: Contingent workers are experienced in their field of work, which provides companies with much more flexibility. It becomes much easier to scale up operations with the help of contingent workers, especially in the face of changing market conditions.
Extra support when needed: Companies can face big projects or rush periods when there are more orders than usual and more work to carry out. When they find they’re short in terms of human resources, they opt for hiring contingent workers to take off some workload and increase efficiency.
Saving on compensation and tax responsibilities: Unlike the financial responsibilities towards permanent employees, companies aren’t obligated to provide specific salaries to contingent employees. Besides, they aren’t entitled to company benefits like compensation programs and tax responsibilities.
What Drawbacks Do Contingent Workers Have?
Hiring contingent workers has some drawbacks, including mismanagement and lack of control over them. Employers can’t monitor how most of the work is done. Besides, business owners lack control over the contingent workers' hours, making them less reliable during specific business hours.
Contingent workers may also not be acquainted with the company culture, making them unaware of how things are done in a company. They also don’t have any close communication with the employees, giving them less leverage when it comes to getting some support.
How Can a Company Onboard Contingent Workers?
Onboarding contingent workers aren’t as extensive as the permanent onboarding of employees. Here are some steps for onboarding them:
Digitized onboarding: Most contingent workers prefer online boarding in today's workforce. They could work from another city or country, restricting their movement to the hiring company. In such cases, the company needs to adapt to collecting all the necessary documents digitally.
Role-specific onboarding: Unlike permanent onboarding, where new employees are introduced to everyone from every department, contingent workers should be onboarded with people from their role-specific departments. This will reduce confusion and help them focus on their communication much better.
Sharing the company culture: During the onboarding process, the hiring company should share the company culture with the worker and ask other employees to help in this case. This will familiarize the worker with the corporate culture much more quickly.
Encouraging constant virtual communication: Contingent workers should be encouraged to stay in touch with others virtually. This will help build a proper connection for the period they’re working for the company and make it easier for them to get help whenever needed.